Third party car insurance covers legal liability after a loss.
Third party coverage is an agreement between an insured and an insurance company that protects against the cost of being held legally liable for a loss by an injured person, or party. Third party liability insurance is included in auto, home, and commercial insurance packages, and also may be purchased separately.
Function
Third party insurance is designed to protect car owners, homeowners and businesses from medical costs, legal fees, court costs and other expenses that accrue when a person is held responsible for a loss, or is accused of one.
Benefits
Third party claims are paid to the injured party, to legal teams, medical facilities and courts, not to the insured. However, the insured benefits by being spared the legal and medical costs that result from being held liable for damage.
Home and Auto
Third party liability insurance is required on all auto policies to cover the costs of bodily injury and the damage to someone else's property as a result of an accident. Third party liability insurance is also a standard part of all comprehensive homeowner policies and protects the insured when another person is injured on the property.
Commercial
Businesses carry third party insurance to cover legal fees associated with employee claims. It also covers the costs associated with injuries sustained by visitors and protects against claims of defective or injurious products. Businesses also can purchase third party insurance for a wide range of other specific risks.
Personal Liability
People who own property of significant value, such as multiple cars, homes or investments, often purchase personal liability policies separately, and in addition to, their home and auto insurance to protect them from third party claims.
