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What is third party car insurance?

Last Updated on December 7, 2023 by admin


The term “third party insurance for car” refers to a type of coverage that pays damages to the owner driver when his/her vehicle causes bodily injuries to other person(s) or damages to another person’s property because of an at-fault accident. Alternatively, such kind of vehicle coverage is also known as liability insurance. Carrying valid insurance coverage is mandatory for drivers by law in the United States and a third party or liability auto insurance cover can suffice this legal requirement. A 3rd party car insurance policy will pay financial losses incurred on treatments of bodily injuries or damages to another person’s property which might result due to an accident involving the insured vehicle.   

Nevertheless, the premiums charged for a third party auto insurance coverage could vary from state to state. Every state will have different coverage limits for resident drivers but it is always desirable to purchase coverage with higher amounts. Such a proposition serves to protect your finances if the expenses on third party bodily injuries treatments or property damages run high. Besides, there are some other factors that might impact the insurance rates provided for 3rd party car insurance covers. These include aspects like driver’s age, gender; his/her exact residential location, marital status, past driving record, credit history as well as the type, make and model of vehicle which is to be insured.   

How does such type of a policy work?

The third party victim(s) will file claim with the driver’s insurance company in the aftermath of an accident to recover the costs incurred on treatment of bodily injuries or repair of damaged property.  Insurers will then investigate the entire matter and pay losses within the agreed upon coverage limits.  

To learn more about third party vehicle insurance coverage and pricing, talk to one of our competent local experts today! We can enable you to fix a free consultation online in few minutes.

What are the Basic Requirements for Getting Third Party Insurance for Cars?

Advantages of Buying Third Party Car Insurance Online

Third party car insurance USA policies offer some unique benefits to drivers as mentioned below:

  • You purchase basic liability insurance that pays costs for treatment of third party bodily injuries and property if you are at-fault during an accident. Furthermore, you have the option to raise the coverage limits so that you get complete protections.
  • The policy will pay costs for legal and court fees if insured car’s driver gets sued by third party victim(s).
  • Such type of car coverage may be available as a combined single limit policy or split limits cover. In a single limit policy, payments towards costs of treatment of bodily injuries caused to third party victims (driver of another car and fellow passengers in it) and property damages will be paid by the same coverage. But in a splits limit liability insurance policy, the coverage limits will be expressed by slashes per accident as follows:
  1. Bodily injury per person/death benefit to one person
  2. Bodily injuries to more than one person/death of more than one person
  3. Damages caused to third person property

The split limits will vary from state to state. For example:

In California: the split coverage limits will be expressed as $15,000/$30,000/$5,000, in Oklahoma: $25,000/$50,000/$25,000 and in Indiana: $25,000/$50,000/$10,000. Talk to an expert through our online third party car insurance compare services to know more about how much is the combined and splits liability insurance third party coverage limits in your state today!

What does a third-party liability car insurance policy typically cover?

A typical third party damage car insurance policy for liability coverage could be available in two types as mentioned below:

  • Bodily injury liability insurance – Such type of a car coverage feature pays costs for treatment of bodily injuries caused to third party victims because of an at-fault accident involving the insured car. But for the coverage to pay losses to 3rd party victims within pre-specified limits, it is essential that the resident driver’s state has a no-fault system in place. If the treatment costs exceed the liability coverage limits then the driver’s bodily injuries liability insurance cover steps in to pay damages to the victim(s). However, if the driver of the insured vehicle resides in a state that has the Tort System in place then it is the medical payments coverage feature which will pay costs for treatment of bodily injuries caused to the driver and fellow passenger in car at the time of accident. The liability insurance cover will pay treatment costs only to the third party victims.
  • Property damage liability insurance – Such type of a car coverage feature pays costs for damages caused to another person’s property regardless of who is driving the insured car. The property that is covered under this feature may include any kind of building structure including lamp posts and even someone else’s vehicle that gets hit by the at-fault driver’s insured car. Again, there will be certain limits within which the damages will be paid and so, it is important that you buy coverage with high amounts so that your finances remain protected.

In the United States, 12 states and Puerto Rico don’t have no-fault system and so, if you happen to reside in one of these states then you may get sued by another driver(s) if you are at-fault during an accident although a set of conditions called “Threshold” will apply.  

To know more about the Threshold conditions, talk to an expert today!

What is the detailed procedure for filing third-party car insurance claims?

The claims filing process in third party auto insurance begins post an accident. If the other driver is not at-fault then you need not file any claim with your insurer. To initiate the procedure, you as driver of the insured vehicle will have to inform his insurer at the earliest and give details of exactly what has happened. It is the auto insurance company that will investigate the turn of events which led to the accident and even coordinate with the other person’s insurer. It is the third party victim (the no-fault driver) who will file the claim with your insurer. Here is how the process might start in such a case.

If the driver attempts to file claim on his own then he/she might have to create an account with your (at-fault driver’s) insurer through the company website or portal. Claim can be filed and progress can be easily tracked online. Alternatively, the driver can directly call to contact your car insurer and file claim based on the car insurance information provided by you as the at-fault driver. The process will be vice-versa if you are a no-fault driver and the other driver is at-fault.       

Typically, for filing a third party vehicle insurance claim with your insurance company, you will need the following details.

  • Your driver’s name and contact number
  • Your driver’s valid license number and details of your car registration
  • Information about your car’s type, make and model
  • Car insurance information (can be secured from the your driver’s ID card)
  • Photos of the accident site and the damages caused to the driver’s vehicle
  • Police report and witness statements

The no-fault driver can file accident report with the local police station if any police officer hasn’t visited the site of accident.

On filing claim, your (at-fault driver’s) third party car insurer will assign an investigator to investigate as to who was at-fault during the accident. If you, as an at-fault driver, have indeed caused the accident then your auto insurer will pay costs for damages to the no-fault driver of another car within prescribed limits. And if the victim driver is a resident of a state with an at-fault system then the at-fault driver’s 3rd party liability auto insurance policy will also pay costs for treatment of bodily injuries caused to the victim driver.       

What are the Alternatives to Getting a Low Cost Third Party Car Insurance Quote?

Before you are out to explore various low cost options for 3rd party car insurance online, it is vital for you to know that the driver of the insured vehicle as well as fellow passengers inside the car at the time of accident are not covered for treatment of bodily injuries and damages caused to the car. To make sure that you, as a owner driver of the insured vehicle, and fellow passengers are covered, you need to purchase some optional coverage features as under:

  • Comprehensive coverage – Such type of coverage pays costs for damages caused to the insured vehicle due on account of bad weather, storm, hail, floods, snow, fire, theft and vandalism.
  • Collision coverage feature – Such type of coverage pays costs for damages caused to the insured vehicle because of an accident, hit by an animal or falling tree branches and collision with another vehicle, building or structure. These are all situations which are not covered under the comprehensive coverage feature.
  • Personal Injury Protection (PIP)/Medical Payments coverage – Such type of car coverage feature pays costs for treatment of bodily injuries caused to the driver of the insured car as well as all fellow passengers in the vehicle during an accident.
  • Uninsured/Underinsured Motorist coverage – Such type of a vehicle coverage feature will pay costs to drivers that have either no insurance or insufficient coverage but their car(s) meet with an accident with the insured vehicle.

In any case, if a driver is living in a state which has the Tort System and meets with an accident with another driver(s) that are at-fault then he/she automatically becomes the third party. In such a case, it is the at-fault driver’s third party or personal auto insurance policy that will pay costs for settling claims as mentioned previously.

How Much Are Current Third Party Car Insurance Cost?

The average cost of third party liability insurance car rental or personal for the year 2019 was around $650.35 per year as per data released by the National Association of Insurance Commissioners. But at an individual level, how much you may have to pay for 3rd party car insurance depends on several factors such your age, gender, residential location, marital status, education, number of miles that are going to be being driven throughout the year, past driving record and credit history. Besides, the exact type, make and model of the vehicle which is to be insured and safety features might also play an important role in the calculation of premium.      

But drivers who have clean driving records, drive less miles annually and reside in smaller towns or rural areas can expect to pay less for 3rd party liability auto insurance. And premiums can be reduced by raising deductibles as well as by bundling home and car insurance.  In addition, insurers offer an array of premium discounts that can reduce premium further. You can determine your eligibility to get a discounted third party vehicle insurance package. Consult a local expert to get started with the comparison shopping process online. Apply now!  

Here Are 5 Important FAQs

Does third party insurance cover car theft?

No. A third party car insurance policy will not cover financial losses caused to the owner driver of the insured vehicle if the car gets stolen or there is theft of some precious belongings/devices inside the insured car. To protect your car and precious belongings/devices from theft, you need buy third party, fire and theft auto insurance policy.

What is third party, fire and theft car insurance?

A third party, fire and theft auto insurance policy is car coverage with expanded scope of application. Such type of a car cover will not only pay costs for liability arising out of treatment of bodily injuries caused to another driver (who is not at-fault during an accident with your car) and fellow passengers in that vehicle but will also protect your insured car if it or some precious belongings inside it gets stolen or damaged due to fire or an explosion.   

Can you get extras added with third party insurance?

Yes. You can add certain extras added a third party car insurance policy. However, by doing so, the cost of coverage may increase substantially. Instead it could be much better to buy a comprehensive or full coverage auto insurance cover and get some add-on features included in it as standard.    

What happens if you are involved in an accident and only have third party cover?

When you get involved in an at-fault accident with a third party auto insurance cover, the policy will pay all costs to third party victim(s) for treatment of their bodily injuries incurred due to the accident and even pay costs for damages caused to third party property or vehicle(s). But if you and fellow passengers in your car suffer from bodily injuries or your vehicle gets damaged in the process, the policy will not cover any costs related to treatments or damages caused to your car. You will have to bear all these expenses by yourself.   

About The Author

Andy Walker is a freelance content writer who specializes in writing for insurance and finance related niches. He has years of experience in this field and has written extensively on a variety of topics. Andy’s work is always highly polished and well-researched, ensuring that his clients are always happy with the results.

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