In a typical auto insurance contract, there are usually two parties involved: the insured and the insurer. The insured is the policyholder, whether a person or entity, who is protected by the insurance coverage. The insurer, on the other hand, is the company that provides coverage protection. But it also happens in some cases that there is a third party involved and that is a person who suffers injury or damage caused by the actions of the insured. This is where the third party auto insurance comes in.
Definition
The term, “third party auto insurance” refers to the insurance policy that covers liabilities to a third party including injuries, damage to property and so on. This type of coverage protects you in the event that you were the cause of the accident. This policy will pay for the damages that you have inflicted on other people.
Purpose
The purpose of this insurance coverage is primarily to protect the policyholder. Anyone who drives a car should get this kind of policy. Even if you deem that you are safe driver who always runs his/her vehicle with caution, it is still possible for you to cause a car accident. The consequences of a car accident, which may include repair of damaged vehicles and medical treatments of injuries, are all very expensive. If you are not insured with this kind of policy, you might end up paying damages worth thousands of dollars to a third party.
Types
Third party auto insurance comes in two different types. The first type is called property damage policy, which covers payments in accidents where you have caused damage to another person’s car or property. This insurance will cover payments on replacement or repairs of the damaged vehicle or property. The second type is the bodily injury coverage, which pays for the person’s injury including medical bills and loss of income due to the car accident that you have caused. In most states, it is required that vehicle owners carry these two types of third party auto insurance policies.
Cost
The cost of auto insurance varies widely so it is a must to get several quotes from different insurance companies before making a purchase. Some of the factors that will affect the rate of the insurance policy include age, gender, location and driving record.
Legal Help
If you are ever involved in a car accident where you have caused damage or injury to another person, it is a must to get legal advice from a competent lawyer who specializes in car accident insurance for you to be properly informed.
