Third party liability car insurance is an insurance policy that offers financial protection to an at-fault driver. This protects in an accident. In addition, it aids damaged properties while operating a car. It only covers injuries and property damage to a third party and their property. However, it does not offer protection to the driver or their property. This can be covered by other types of policies.
The two parts of Third-Party Liability Car Insurance are property damage and bodily injury liability.
Bodily Injury
Bodily injury clause covers the at-fault driver from medical expenses, legal fees, loss of income, and funeral costs.
Property Damage
This clause covers the replacement and cost of repairing. In case the driver’s car is involved in the accident and their property is damaged.
How Third-Party Liability Car Insurance Works?
The insurance policy helps to cover the damage cost as a result of an accident. In many cities, if a driver is at fault in a car accident. Then, their insurance company is responsible for the medical and property expenses. This is to cover the costs of the other party involved in the accident up to the policy’s limit. In cities with no-fault car insurance, the driver involved in an accident must initiate the claim process. They should inititate the process with their insurance company regardless of who is at fault. In those cities, the drivers are requested to purchase personal injury insurance. This would cover their accident-related medical expenses for their families.
Third-Party Liability Car Insurance Coverage Limits
Third-Party Liability Car Insurance has a dollar limit on each of its parts. This depends on the coverage level the driver choose when purchasing the policy. Here are the components:
Liability Limit for Property Damage
This specifies the maximum amount of coverage for property damage. Any amount that exceeds the set limit becomes the responsibility of the at-fault driver.
Liability Limit for Injured Per Person
The per-person limit is the maximum cost paid by the insurance company for every person injured in the accident.
Liability Limit for Bodily Injury per Accident
The liability limit per accident is the financial limit for the total amount paid by the insurance company. This is for all the people involved in the accident. In a simple explanation, the policy covers medical expenses for the injured individuals in an accident. However, where the driver was at fault, but only at a predetermined total. Then the responsible driver will be liable for any medical expenses above the set limit.
Requirements for Liability Car Insurance
Each city has set a limit for how much liability coverage a driver can get. For example, a city might need drivers to have liability insurance.A $25,000 coverage for injuries per person or a $40,000 coverage to cover injuries to multiple people. Or a $60,000 coverage for death per person, and $80,000 coverage for property damage.
Drivers have the option to purchase more liability insurance than the required minimums. This is the best move since medical bills can be expensive. If you have valuable assets to protect from a lawsuit then it’s advisable to buy an Umbrella insurance policy. This will increase the liability coverage on your car and homeowner’s insurance policy to $1 million or more.