Introduction to Third Party Car Insurance
Picture yourself driving in traffic, heading down a road at a good clip, when you hit the rear of another vehicle with whom you did not have the opportunity to apply the brakes. It’s the other driver who is angry and there is a lot of damage to the car. What now?
And the good news is, if you have optional third party car insurance. Therefore, what is covered by it? How does it protect you? And what are its limitations? In this article, we will cover all the basics of third party car insurance, use in the real world and tips from the professionals.
What is Third-Party Car Insurance?
Definition and Basics
Third party car insurance is basically an auto insurance policy which provides financial coverage to the losses or injuries inflicted to a third person by your car. It does not cover the damage to your own car, as opposed to comprehensive coverage.
Legal Requirement
More often than not, it is compulsory to have third party insurance. The World Health Organization (WHO) say that road crashes amount to 3% of GDP to economies each year. In order to curb out financial loss and hold peole accountable, governments indulge third party insurance as an indictaion.
Any party other than Center party or two of The Major Party is known as Third Party.
- A third party can be:
- Or drivers you damage other drivers’ cars.
- As pedestrians or cyclists, he had gotten involved in the accident.
- You hit bodies of water, property owners of structures (walls, fences etc).
Third-Party Car Insurance Cover?
Damage to Other Vehicles
Your insurance will also cover repair to their car if you get into an accident and smack into another car. For example, according to Insurance Information Institute (III), Study in 2019, the average property damage claims were \$4,525 per incident.
Injuries to Other People
Medical expenses, hospital stay and rehabilitation expenses of the victim of accident be they a pedestrian or other driver, which you can injure, are paid through third party insurance. For instance, UK average car accident injury claims are in excess of £13,000.
Legal Costs
Your insurance will include legal fees should you be sued by the injured party also compensation settlements. If you had not had this coverage, you would have had to pay out of pocket thousands of dollars.
NOT Covered by Third-Party Insurance?
Damage to Your Own Car – If your car is damaged when you cause an accident, you will have to pay for the costs of repair or acquire additional comprehensive insurance.
- The medical expense is not covered in the personal injuries.
- The theft or fire damage of the car is not under third party insurance.
- They do not cover any breakdowns due to wear and tear.
Drivers Choose Third-Party Insurance?
Lower Premium Costs
Third party insurance is cheaper than comprehensive insurance, and that is why it is a good option for those looking at policies on the basis of pricing. And in India, third party policies are as much as 50 percent cheaper than comprehensive.
Older Cars & Low-Value Vehicles
If you’ve got a 10 year old vehicle that’s worth only $2,000, then such a vehicle is probably not worth paying high premiums for comprehensive coverage on it. Alternatively, third party insurance can fulfil the requirement without unwanted expenses.
Minimal Driving Usage
In other words, if you don’t drive much and have most of the time on the road, your car will be in less chance of being damaged; thus, it is a good choice to buy the third party insurance.
Insurance Saved a Driver Thousands
Sarah is now a 30 year old freelance graphic designer. Sarah was on her way home on a rainy evening and she hit a luxury SUV at a red light accidentally. The repair costs amounted to $10,000. Fortunately, her third party insurance paid up for the damage, and she only had to pay her deductible. Without it, Sarah would have faced a severe financial setback.
How to Choose the Right Policy
Assess Your Risk Level
Comprehensive insurance may be more suitable if you drive in hectic parts of town. Third party insurance can prove adequate if your driving is only occasional in low risk places.
Compare Premium Costs
Seek and compare the outward quotations of several insurers. Of course, you can use many tools to help you find the best mobile online shopping deal out there.
Check the Claim Settlement Ratio
Select an insurer with high claim settlement ratio (CSR). Thus, if the CSR of a company is above 90%, it makes their claim process go smoothly.
Conclusion
Third party car insurance is a very important coverage, which will take care of the unwanted financial liabilities for the driver. While it does not cover personal car damage, it should pay for others who are involved (drivers and pedestrians), if they sustain a loss, as a result of your vehicle. It is a great budget friendly policy if you are looking for meeting legal insurance requirements.
But before adopting a decision, however, take time to analyze your driving habits, the value of your car and your level of risk. Ultimately if you become a victim of a disaster regardless of whether you have taken third party or comprehensive insurance the main idea is to drive safely and remain financially safe. You see, nothing is more priceless than peace of mind on the road.
