Third party car insurance is nothing more than liability coverage that is purchased by an individual (first party) from an insurance company (which serves as a second party) that protects them from claims from another person (also known as a third party). Whenever a car insurance claim is filed against a person, it is their third party car insurance coverage that pays for the damages that they may have caused unto another person (third party). The concept of this type of insurance is not very confusing, yet many people aren’t able to fully understand it because they have not really done much research into their auto insurance coverage policy.
Contact an Insurance Agent for More Information
Anytime that you do not understand the type of coverage that you have in your policy or want to understand a specific type of coverage like third party car insurance, it is always a good idea to talk with a professional from your car insurer. In each case, the amount of coverage that you will get for third party damages really depends on the type of policy that you have purchased. If your policy is fully comprehensive, you likely will not need to worry about whether you are covered from damages caused to a third party in the event of an accident. This is because comprehensive car insurance policies are generally known to cover nearly everything that could possibly go wrong while on the road.
Third Party Car Insurance Claims vs. First Party Car Insurance Claims
Whenever a third party (another person) makes a claim against you for something like collision damage or for medical damages that were caused by an accident that you were at fault for, your insurance company will need to pay them. In most cases they are required to pay based on the fact that auto insurers provide third party car insurance. People often get confused when trying to figure out the difference between third-party coverage and first party car insurance. First party coverage allows you to get compensation for damages that occur to your vehicle in which no third party is held liable. In this case, your own insurance company would be responsible for paying you directly for repairs.
For example, let’s say that your sound system was stolen out of your car and you came back to find that your subwoofers and speakers were missing. If you had a comprehensive car insurance policy, you would need to file a car insurance claim about the stolen parts/items from your vehicle. It would be the first party car insurance coverage that is included in your policy that would require your insurance company to reimburse you for the losses that you suffered.
Third Party Car Insurance When you are “At Fault”
People that are considered to be “at fault” in accidents are generally going to need to have good third party car insurance. Without this type of insurance, they will not be able to compensate the individual that bodily injury was inflicted upon and/or vehicular damages. In addition, property damages may be assessed at the scene of an accident and guess who gets to cover the costs for those? The party that is “at fault” will also be responsible for reimbursing other third parties that need to be compensated for damages. For example, if the accident caused a vehicle to go through the shop window of a store, the owner of the store would need to get window replacements and a possible replacement of merchandise.
When you are “at fault” in an accident, it is never fun, but it is something that you and your insurance company need to deal with through your third party coverage. Fortunately, virtually everyone that has insurance has various types of third party auto insurance protection. If you don’t have third party coverage, then you are lacking adequate insurance. In some cases, third parties may take you and/or your insurance company to court to file a lawsuit for damages. Having third party insurance will protect you in the fact that you will not have to pay directly out of your pocket for the damages that they need compensation for; your insurance company will take care of making the payments.
Third Party Car Insurance When you are Not “At Fault”
When you are involved in an accident and are not the person who is “at fault” for the accident, then the other person will be required to use their insurance to compensate you for any damages that you suffered. If your vehicle is totaled, they will be responsible for replacing it or compensating you in cash for a new one of the same overall value. If you needed to go to the hospital after your accident because you suffered a broken arm or other bodily injuries, the party that caused the accident will be required to pay you for the medical bills and damages.
If you had to see a psychologist after an accident based on the fact that you had severe anxiety or stress as a result of the crash, you will get the money back that you spent on your appointments. The car insurance settlements that you are involved with will by the third party and their insurance company. As long as it is known that you are not at fault and another party is “at fault” for the accident, you will not need to worry about paying out insurance money. In this case, the other party is able to take advantage of their “third party insurance” and it is this type of coverage that requires their insurance company to make the payments that they owe.
Third Party Auto Insurance in the United States vs. United Kingdom
United States Car Insurance Requirements
In the United States, car insurance that covers liability and property damage is mandatory in most states. Each state has different rules and regulations, but it is required that you have some type of third party car insurance coverage. Some states do not require full liability insurance, while other states instruct their residents to pay a yearly fee to the state for each vehicle that they have decided to go without liability insurance.
Other states enforce penalties upon individuals that do not abide by proper auto insurance requirements. In most cases, though, if you are a U.S. resident and have your car insurance through a trusted provider, you will have the coverage that you need. As a rule of thumb, always purchase third party insurance to keep other people protected in the event that you cause an injury. Failing to have this type of insurance will require that you pay out of your own pocket for damages; this could put you into debt and legal trouble.
United Kingdom Car Insurance Requirements
Since the year of 1930, it has been illegal in the United Kingdom to drive without third party personal injury insurance. After the initial induction of the law requiring motorists to have third party personal injury insurance coverage, the Road Traffic Act in 1988 required UK drivers to be insured, have a security policy, or have made a deposit towards coverage with the Supreme Court Accountant General. Failing to have some type of protection that can be used to protect you from third party damages is illegal. If you are a driver in the United Kingdom, it is a good idea to make sure that you are protected from any third party damages that you may inflict in the event of an accident.
Third Party Auto Insurance Protection is Essential
The reason that third party car insurance is essential is because people will take you to court and file a lawsuit against you if you fail to have insurance protection that pays them for damages. Since it is required by law in both the U.S. and the UK that you have third party protection, it would be smart to make sure that you have some. Most popular insurers like Geico, Progressive, AllState, State Farm, Esurance, and Nationwide will be able to help you get this type of coverage if you do not already have it. Buying car insurance is not too difficult once you compare quotes and figure out what the right coverage policy is for your type of vehicle.
People that have already purchased insurance policies from trusted providers will likely already have the third party protection that they need. Motorists that want to make sure that they have the necessary third party coverage should contact their auto insurance company and ask whether they have enough coverage. People that have comprehensive car insurance policies will usually not need to worry about being protected because “comprehensive coverage” means “very extensive coverage.” If you know someone that doesn’t have third party car insurance (or any type of insurance for that matter) be sure to explain to them why it is essential or show them this article so that they can have a better understanding about the consequences of not having proper auto insurance.