What Is Third-Party Car Insurance ?
Third-party insurance (also called liability insurance) is a type of automobile insurance that provides financial protection to the third party for damages or injuries caused by the insured car. This insurance covers damage to third party properties but does not provide coverage for insured's car. Therefore, this insurance plan only provides financial protection against a third party liabilities. Third-party insurance is mandatory or compulsory in mane nations
Benefits Or Advantages Of Third-Party Car Insurance.
The main advantages of purchasing third-party insurance can be highlighted as follows:
1. Affordable
Third-party insurance is less expensive than comprehensive car insurance policy. Generally, premiums for this insurance is much lower than comprehensive plans because of limited coverage.
2. Suitable
Liability insurance is suitable for older vehicles having less market value. It is also useful for budget-conscious and occasional drivers.
3. Legal Requirement
This type of insurance is the minimum level of auto insurance required in many countries. So, third-party car insurance ensures compliance with the law.
4. Simple Process
Another notable advantage of third-party insurance is that it is simple to understand. It requires short process and less paper work to buy this insurance policy.
5. Covers Third Party Damages
It provides financial compensation (for medical bills and property damages) to third party (other vehicles) if insured's car involved in the accident and made any damage or injuries.
Disadvantages Of Third-Party Insurance
Some of the major drawbacks or disadvantages of third-party insurance can be highlighted as follows:
1. Narrow Scope
Third-party insurance has limited scope than comprehensive car insurance policy because it does not provide damage or injuries coverage to the car owner or insured.
2. Not Suitable
This car insurance policy is not suitable for expensive and luxurious vehicles having high market value because it does not provide adequate protection.
3. Inflexible
Another disadvantages of third-party insurance is that it cannot be customized like comprehensive insurance. Therefore, it lacks customization and flexibility.
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4. Higher Costs
As we know that third-party insurance provides limited coverage and does not cover own (insured person) damage and medical expenses, it leads to higher out of pocket expenses for the vehicle owner.
Pros And Cons Of Third-party Car Insurance In Brief
Pros:
- It is easy to understand and quick to purchase the policy
- It cover third party property damages
- It ensures legal compliance
- It is suitable for old vehicles
- It offers peace of mind
Cons:
- It is impossible to customize
- It does not provide full coverage like comprehensive insurance
- It's scope is limited than other types of insurance policies
- It is not suitable for new cars having higher value.
