A motor insurance policy is a mandatory policy issued by an insurance company as part of prevention of public liability to protect the general public from any accident that might take place on the road. The law mandates that every owner of a motor vehicle must have one motor insurance policy. A motor insurance plan financially protects you against exorbitant medical costs. It covers all hospitalization expenses, thus allowing you to focus on speedy recovery, instead of worrying about finance. According to the Motor Vehicles Act, it is mandatory to purchase a third-party liability insurance policy in India.