Third party liability insurance

Third party liability insurance

Third party liability insurance helps the policyholder to cover the cost of damages to others caused by the policyholder. Medical expenses of injuries to someone caused by you are also covered by third party liability insurance. 

If you cause damages to another person then you need to include third party liability insurance in your insurance policy to cover the expenses of hospital and repair cost of the property of others’.  If your insurance policy does not include third party liability insurance then you can be sued in the court to recover the losses to a third party caused by you. You would have to pay for the cost of damages from your pocket to the injured party if you are not covered under the third party liability insurance. 

Some car insurance companies offer commercial liability insurance, homeowner insurance, and car insurance with third party liability insurance coverage to their customers.

Why do you need to purchase third party liability insurance?

Third party liability insurance protects you against the damages caused to another person due to your fault. If you do not have liability insurance then it is tough to pay for the damages from your pocket. Sometimes the cost of damages may be high enough to pay from your pocket. In this situation, the court can sell your assets to pay for the damages to another person caused by you.  So it is a good option to purchase third party liability insurance which protects you from the claims filed against you by the third party to recover the losses.

Which insurance policies cover third party claims?

Third party claims are not covered under all the insurance policies. Third party claims are covered by the insurance policies that you select at the time of purchase of third party liability insurance. When you purchase employment practices liability insurance then you also need to purchase third party liability insurance policy. It helps to cover the claims that are filed by the customers against the business. 

Before purchasing any insurance policy ask your insurance agent that your insurance policy covers the third party liability claims or not.

 

Third party liability insurance policy is mandatory in a car insurance policy

If you are at fault in an accident then you need to purchase third party liability insurance as a part of your car insurance policy. In most of the states of the USA, it is mandatory to purchase third party liability insurance in your car insurance policy. It is against the law to drive cars without third party liability insurance policy in almost all the states of the USA. 

Third party liability insurance coverage helps you to protect against the damages caused by you in case of an accident. Third party liability insurance coverage covers the following:

  1. Medical expenses of others 

If you are at fault in an accident then third party liability insurance coverage helps to cover the cost of medical expenses of injuries to others’ and hospital expenses of others’. If you are not insured under the third party liability insurance coverage then you will have to pay for the medical expenses of others’ from your pocket. 

  1. Property damages of others’ vehicles

You need to include third party liability insurance coverage if you are at fault in an accident and caused damages to another driver’s vehicle. Third party liability damage helps you to cover the cost of damages to other driver’s cars. Otherwise, you would have to pay the repair cost of the vehicle of another driver if you do not have third party liability insurance coverage in your car insurance policy.

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Homeowner insurance and third party liability insurance coverage

Home insurance policies usually include third party liability insurance coverage. A homeowner’s insurance policy protects you to cover the cost of incidents at your house. Third party liability insurance in your home insurance policy helps you to cover the claims against you by the third party due to incidents at your home such as animal bites, slips, etc.

Commercial liability coverage and third party liability insurance coverage

Owners of the business usually purchase commercial liability coverage policy which helps them to against the claims made by the non-employees of the business such as customers. Commercial liability coverage helps the businessmen to cover the bodily injuries and property damages of customers of the business if commercial liability insurance includes third party liability. It also helps the policyholders to cover the witness fees, court fees, attorney fees, etc. 

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