Most people know something about car insurance. This is because any vehicle driven on public roads must have a certain level of insurance. The Road Traffic Act ensures that drivers must meet liabilities they incur should they injure other people or cause damage in an accident. The person who is injured is known as the third party. The first and second parties are the car driver and his or her insurance company. The third party may be a pedestrian, a passenger in the car driven by the insured person, or the driver or passenger in another vehicle.The injured third party can claim compensation from the driver of the offending car. The driver then relies on his or her insurers to pay the other person's claim.
UK Insurance Web Guide