What Is Third
Party Insurance?
Third Party Insurance:
Generally, in damages
recovery system there are two different types of insurance. One is the first
party insurance and the other is called the third party insurance by the
insurance companies. Usually in a third party insurance policy the insurance
company will indemnify the injured person if he or she is legally held liable
for injuries or damages done to third party. The first party is the insured
person, the second party is the insurance company and the third party is the
injured person who claims damages against the insured person. Read more about
different types of insurance.
Some Important Features Of Third Party Car Insurance
·
Third party
insurance is
compulsory for all motor vehicles and it plays a significant role in motor
insurance.
·
In third party
insurance the insured person will not have any compensation for injuries but it
covers damages to other people who are injured by the insured.
·
The main
beneficiary in third party insurance is the injured third party and the insured
is only the beneficiary of the policy. Here the insurance company pays directly
to the injured third party.
·
As it is not
possible to know in advance the liabilities, in third party policies the
premiums do not vary with the value of what is being insured because the
insured sum is the legal liability.
·
Third party
insurance is almost based on fault done by the insured. You have to claim for
damages by providing evidence that the insured person had made fault and is
legally responsible for the damages.
·
Third party insurance
involves the aid of lawyers.
Usually the third party insurance is not that popular as
compared to first party insurance in the whole insurance company because you
can never know the maximum amount to pay under third party policies.
Third Party Insurance and Other Insurance
Third party offers certain coverage including protection against fire and theft
to policyholders. According to the law you have to compensate the damages if
are guilty of accidents that occurs on roads. The law supports that you must
have at least third party insurance policies to protect yourself from other
people’s claim against you. Third party insurance can save your money
without being spent from your pocket. If you are a third party policy holder
then the insurance company will compensate for all the damages you have done.
Other than accidents third party insurance also has policies that covers fire
and theft risk. Suppose if your car catches fire or is stolen then the
insurance company will offer disbursement to pay for the car.
As compared to
other insurance, third party insurance may not
have comprehensive coverage but it is most required when it comes to motor
vehicles and road accidents. Most of the car insurance companies often do not
have coverage on mechanical and electrical damages. Car insurance also does not
have coverage on wear and tear. But however third party insurance has certain
policies that cover all these risks. So if you really want to protect your
vehicle and save your hard earned money then a third party insurance is most
essential and is a must for all vehicle owners.
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