Looking at the context of current Motor Vehicles Act of India the minimum insurance cover that is mandatory for two wheeler owner is to have is a third party cover.A third party cover insures one against third party liabilities. In case any damage to a third party property or a death of a third person caused due to acts of driving can lead to legal liability arising on the owner of the two wheeler and if your policy has a third party cover , all these legal liabilities can be taken care by the same.
Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedgeagainst the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraisingand controlling risk, has evolved as a discrete field of study and practice.