We often hear the term “third party liability coverage” for an insurance policy but what does it really mean and are you covered in case of a car accident?
A third-party liability coverage is the part of the insurance policy that protects drivers if they are legally held responsible for a car accident that led to physical injury of the other person. This includes the damage caused to someone else’s property.
Third Party Compensation Only
The most basic thing you need to understand is that under third party liability coverage, it only compensates the third party. It will not provide compensation for insured persons under your car insurance policy.
If you get injured during a car accident but are insured under your car insurance policy, this does not apply to you. It also does not apply to other persons in your party that are also insured under your car insurance policy.
Third party liability coverage is always purchased in a certain amount. This sets the limits of liability, which refers to the maximum compensation that your insurer will pay to the offended party and in total for one incident.
Not Your Fault
Third party liability coverage is only applicable if the car accident is not your fault. If you are found to be at fault, whether solely or in part, for the car accident, you will not receive any compensation.
Family and Other Members of the Household
Generally, third party liability coverage of car insurance policies not only cover the driver. It also extends to the immediate family or other members of the household. Other persons who were given permission to use your vehicle are also covered.
One thing to remember here is that your policy will only be applicable for the insured members if they are occupying or driving the insured vehicle at the time of the car accident.
On the other hand, you can file a claim against the other person’s third liability policy regardless of what vehicle you are riding in when the car accident occurred.
Don’t hesitate to send me an email if you need further clarification or have any questions about third party liability coverage.