Third Party Car Insurance Explained
July 16th, 2010
- According to InvestorGuide.com, the first party in an insurance agreement is the person who has a contract with the insurance company while the third party is the other person involved in the accident. If you have first party insurance, it extends to cover damage done to your car. However, third party liability insurance only covers the damage done to the other driver and his car.
- Most states require that you have at least some third party coverage before you can own a car, according to InvestorGuide.com. But buying third party insurance is a good idea anyway. It can save you a lot of money and hassle if you do get into an accident.
- You can choose to cover property damage, which covers damage to cars or other property or bodily injury, which covers medical expenses and lost work wages, when selecting a third party insurance policy. However, it is common for insurance companies to offer different tiers of maximum payout. Of course, the highest tiers will cost you a more expensive premium each month.
- Third party insurance will not cover you or your car if you are involved in an accident. However, if the other driver is at fault, it is the responsibility of his insurance company to pay you. If you are involved in a single car accident, your third party coverage will not pay for your hospital bills.
- In most situations, your third party liability insurance will cover damage you do to another party if you’re driving a rental car, but not the rental car itself. If you have full, first party coverage you can probably skip the insurance offered by the rental company, but third party liability insurance will not cover any damage to the rental and taking the extra coverage, though costly, is advisable.
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