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Car Insurance Third Party Liability

Car insurance third party liability is an important part of a vehicle insurance policy. Every driver needs third party coverage for protection in the case of at fault accidents. Auto insurance is mandated by law virtually everywhere across the country. A car insurance policy is a contractual agreement between two parties, each of whom make promises according to the terms of the policy. The first party is always the insured driver or policy holder. The policy holder by signing on for auto insurance protection agrees to abide by the terms of the policy. These terms can vary, but they always include a few key factors.

Auto Insurance Policy Holder's Responsibilities

One of these factors is payment. The insured policy holder in entering into a contractual agreement for auto insurance protection agrees to the payment terms set forth in the particulars of that agreement. They may include a down payment and a series of installment payments toward the full premium, due at certain predetermined dates. Full and timely payment of the premium is very important. It is the responsibility of the insured policy holder to attend to this detail. Failure to do so can result in forfeiture of coverage.

Another common factor across all policies is honesty on the application. Drivers who hold back important information either purposely or on accident are also subject to immediate cancellation or significant premium increases if the insurer discovers this pattern of dishonesty. An example could be falsifying mileage totals on a low miles policy, or neglecting to inform the insurer about a new teen driver gaining licensure and access to the family vehicles. These and any other failures to disclose important information represent violations of the terms of auto insurance contractual agreements.

In exchange for the policy holder upholding all terms of the auto insurance agreement, the insurance provider is in turn responsible for holding up its end of the bargain. Insurance companies are the second party in auto insurance contracts, since these contracts are agreements between two parties. As the protector of the insured, the insurance company is obligated to provide the protection promised according to the terms of the agreement. This protection particularly includes financial safeguarding from direct responsibility for bearing expenses charged by third parties in at fault auto accidents. Third party liability is the agreement between the insurance company and the insured that the provider will take care of liability costs stemming from at fault accidents up to the limits of the policy, less deductible.

Third Party Liability is Essential

Auto insurance is critical for anyone who owns a car. This is especially true of third party liability. Beyond the obvious legal connection and that fact that almost all drivers have to have car insurance liability protection according to state law, coverage is critical because the potential out of pocket costs in the aftermath of an at fault accident could be catastrophic for a driver who has no insurance. The prospect of having to take on the expense of repairing or replacing someone else's car, or the cost of medical care and other associated expenses for the driver and passengers of that car, are too much for most drivers to even consider. This is, of course, in addition to those same potential expenses for the driver's own car and medical care in these accident situations.

Car insurance in general terms can be divided up into two general types: third party liability and first party coverage. First party insurance protection is not generally required by state law, though many drivers do opt to include this protection in their policies. It protects the policy holder and passengers from medical costs, and the auto owner from uncompensated property losses.

Saving Money on Liability Insurance

Liability insurance is not the best place to look to cut in order to save money on auto insurance premiums. In fact, most experts in the industry suggest the opposite. Drivers should carry as much third party coverage as they can afford. The reason for this is that in any accident situation, there is the potential for huge damages from civil litigation including pain and suffering or lost wages claims to go on top of medical costs and property losses. Policy holders are wise to max out on the liability coverage in their policy.

With this in mind, the best way to go to save money is to shop around for affordable insurance protection. Smart consumers will take a little time beforehand determining exactly how much coverage they are looking for in an auto insurance policy, and then go shopping for the best price. The online insurance market is a great place to get this done in an expedient manner. Auto owners can gather multiple quotes online in short order and save big money.


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