Third party auto insurance refers to any part of your auto policy that protects you from potential lawsuits due to an accident that you may have caused. This includes bodily injury coverage as well as property damage coverage for any other drivers who may have been involved in the accident.
Third party auto insurance is also called liability insurance because it only pays out to other drivers, and does not cover your own personal injury or vehicle damage.
State requirements
Each US state includes its own requirements for liability insurance. Drivers need to purchase a minimum of this kind of insurance to get a vehicle on the road legally. Driving without insurance can lead to large fines and even arrest situations.
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.
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