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.
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.