What Does Auto Third-Party Liability Insurance Cover?
2 Answers
Third-party liability insurance covers three types of compensation: first, death and disability compensation; second, medical expense compensation; and third, property loss compensation. Definition of third-party liability insurance: Third-party liability insurance refers to a type of insurance where, when the insured or a qualified driver permitted by the insured causes a traffic accident while driving an insured motor vehicle, resulting in personal injury or property damage to a third party, the insurance company will bear part of the compensation amount, significantly reducing the insured's compensation pressure. The difference between this insurance and compulsory traffic insurance is that it is a commercial insurance, with a deductible rate and certain exclusions. Compensation amount: Most insurance contracts clearly specify that the compensation amount is generally related to the insured's liability limit and deductible rate. If the insured's compensation amount exceeds the liability limit, the payout will be the liability limit multiplied by the payout rate. If it is less than the liability limit, the payout will be the compensation amount multiplied by the payout rate. However, if the insured fails to follow the contract's stipulations, any additional compensation amount must be borne by the insured.
A veteran driver with decades of experience says that third-party liability insurance is absolutely the highlight of auto insurance, specifically covering compensation for losses you cause to third parties in an accident. For example, if you accidentally hit someone else's car or injure someone while driving, the insurance will help pay for repair costs, medical expenses, and even lost wages. Common scenarios include scraping another vehicle or causing injuries that require treatment, all of which are covered. When choosing insurance, make sure the coverage amount is sufficient—if it's too low and you can't afford the compensation, you'll have to pay out of pocket, especially when driving in urban areas where risks are higher. From my own experience, a minor accident cost nearly 50,000 in compensation, and third-party liability insurance covered it all. It’s also legally mandatory—driving without it is a crime. Additionally, pairing it with a no-deductible add-on ensures greater peace of mind, saving you trouble later.
