Accidents happen unexpectedly, no matter how good of a driver you are. The problem here is not only the injury you got. You also need to deal with insurance companies and expensive medical fees. Worst comes to worst, the doctors may not accept a third party insurance. It can lead to financial drought and an unstable mind.
So, this article is here to discuss everything about third party liability. In addition we will also give some insights about how important a third party is.
What is Third Party Insurance?
Third party insurance is actually protecting yourself from the actions of other people. For example, you are involved in an accident and you are at fault. The other person might decide to sue you. This is where your third party insurance will come in.
So, when it comes to insurance, there’s these three parties that you’re looking to cover. In this case, you’re the first party, your insurance company is the second. The third party is the person who wants to sue you. In other words, the primary coverage or primary liability is yourself. The one who actually bought the insurance. Take note it can be yourself personally or it can be the company that you possess. Then the secondary is actually the insurance company that is picking up the risks. Then lastly the third party where you’re assigning the risks.
So here’s an example. Let’s say you’re a catering company. You rent out a hall so you have your insurance. The insurance covers you but you need to extend your liability over the hall. This is to help you cover if there is a trip, fall or somebody gets sick that’s attending the event.
Another example. Let’s say you’re a careful driver, and you’re traveling using a truck. But accidentally you crash into someone. That person might sue you, so in this kind of situation you might need third party insurance. Because what you need to do here is protect yourself from a third party that may want to sue you.
The main thing to understand is policies can be very very different. Some policies will just automatically cover a third party. Sometimes it’ll actually charge you a fee. So the best thing to do is to talk to your carrier to fully understand your policy.
What is Third Party Liability ?
Well, third party liability is the term used when the “at fault” insurance company covers the injuries and costs that come from an accident. In simple words, you are not paying for the expenses. Neither does your own insurance company. Instead the “other” man’s insurance company will shoulder the bills.
Let’s have an example, in order to successfully understand it. Let’s say Ronny was tired and he was driving home from a long tiring day at work. He’s sleepy and not paying attention to the road. Jeyz was there waiting for the stoplight to turn green. Suddenly, Ronny accidentally rear-ended his car. The accident gave Jeyz several injuries, but good thing he is covered by Ronny’s insurance. That thing is a third party liability. This might sound simple, but there are actually many challenges with dealing with third party liability.
For example, there are some instances that the “at fault” insurance company doesn’t agree with the doctor’s recommended treatment. So, they will refuse to pay for it, they will tell you it’s too expensive.
In the context of car insurance, third party liability is mandatory. This provides insurance for the damages you’ve done to another vehicle or person. It covers damage to another person’s vehicle, bodily injuries and permanent disability in an accident done by your vehicle. Take note it does not provide insurance to your vehicle.
Third Party Insurance vs Comprehensive Car Insurance
Most car owners are experiencing doubt when it comes to renewing car insurance. There’s a question which one to buy, Third party insurance or Comprehensive insurance? So, in order to answer this question, we need to know the difference between the two.
The third party insurance, also called the TP policy, is a liability only plan. How does this work? Let’s say, in a road accident if you injure someone or damage their property. They could claim on your TP policy. Comprehensive on the other hand is a bigger plan with two components. The owned damaged cover and TP policy. Having this policy can recover damages to your own car as well as to a third party.
So, a comprehensive plan covers more than just road accidents. You can also claim for a broken windshield during a storm, car theft, floods or other natural disasters. Take note TP policy won’t cover any of these.
Which one’s more expensive? Well, obviously Comprehensive policy is expensive. It is because it covers your car’s losses to basic owned damage. Take note the premium depends on the car’s make, model and age.
So, which one is better? If you use your car on a regular basis, or if your car is new and if it is a bit expensive. You should consider comprehensive policy over third party insurance. Take note in terms of protection, “Buy right, Not less”. To know more about comprehensive insurance, you can visit “Car Comprehensive Insurance”.