Understanding Third Party Car Insurance

January 27, 2012

The world of car insurance is somewhat complicated, as new drivers will find out when they select policies for their vehicles--part of nearly any auto policy is third party car insurance, which can protect against liability on the road.

What Is Third Party Car Insurance and What Does it Cover
Third party car insurance covers injuries to other drivers and passengers, and damage to other vehicles in accidents where the policy holder is at fault. These kinds of policies do not cover any damage to the drivers and vehicle or its passengers.

How Third Party Car Insurance Is Represented
In a typical car insurance policy, third party or liability car insurance is represented by a set of 3 numbers, such as 100/300/100. These numbers represent dollar amounts in the thousands, where the first number applies to each passenger's injuries, the second number applies to total injury awards per incident and the third number reflects the amount allocated for property damage.

Who Has Third Party Car Insurance
The fact is that all US states now require mandatory third party or liability car insurance in order to get a vehicle legally on the road. That means that all drivers need to select this kind of insurance coverage. However, many drivers who want to protect their liability in full choose packages that are beyond the state minimum requirement, to make sure that if they cause an accident, the insurance company will cover all of the payouts.

Driving without insurance can lead to large fines and even arrest situations.

State Requirements
State governments set these requirements to avoid a lot of unpaid claims in accident situations. Some drivers purchase more than the state requirement in order to safeguard their assets and be sure that their insurance will cover the costs of any accidents they may cause.

Why You Need Third Party Car Insurance
If there is no third party car insurance, the victims will take the driver who caused the accident to court and try to collect their money from that individual directly.

There are many options to choose from in selecting third party car insurance. Talk to an insurance representative about what is available for this kind of policy.