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Looking to get third party insurance and wondering how the different types differ? Then let us walk you through what third party insurance really means, the different types of it, and whether it’s the only one you should be getting for your road shenanigans.
You might have heard people recommend you to get comprehensive car coverage instead of third party insurance. But what’s the difference between the two? And can you really substitute one for another?
So before getting into whether all third party policies are the same, let’s first understand it (and how it differs from the famous comprehensive car coverage policies!).
By the way, if you’re driving without one, see the NRMA website for more information on how you can obtain a third party insurance policy.
Third party compulsory insurance basically covers the costs involved when you cause bodily harm to another person while driving on the road. This could be another driver, a cyclist, or a pedestrian.
Once you bump into them and cause injury, they are entitled to receive compensation from you to pay for their medical bills, which could be quite hefty sometimes. This means paying them out of your pocket might leave your bank account in shambles. In the worst case, inability to pay this money might lead to legal action against you.
And this is where third party insurance protects you — the victim of your reckless driving can simply file a claim with your insurance company, which will take care of their medical bills. Simple and easy.
But not really — that’s because medical bills are not the only cost involved in an accident. For starters, if you’re at fault, the victim is also entitled to receive compensation for their car (or property) repair bills. Third party insurance does not cover either, which could leave you in a difficult situation.
And that’s where comprehensive car coverage comes in — it takes care of your victim’s car or property repair bills. But not only that, comprehensive car coverage also takes care of your car repair bills (which you’re bound to pay in any accident, no matter who’s at fault). Third party liability insurance doesn’t cover this, so it’s not really the ideal option.
Finally, accidents are not the only way your car can get damaged — storms, floods, fire, and theft are common occurrences in some parts of the world, and third party insurance doesn’t cover any of these. Which policy does? You guessed it — comprehensive car coverage.
Important note: comprehensive car coverage does not cover bodily injury to another party, which is why legally, it can’t act as a substitute to third party liability coverage.
Well, not really. The policies differ based on the exact version of third party insurance you have as well as the insurance company you bought it from.
Third party compulsory insurance is just one type of third party insurance, and it’s the one we described above. But several non-compulsory types of third party insurance also exist, and (unlike third party compulsory insurance) you’re not required to purchase these by law. One example is third party fire and theft insurance.
This type of insurance will not pay for the medical bills of a person you injure while driving. Instead, third party fire and theft insurance will pay for the car or property repair bills of your victim. Not only that, third party fire and theft insurance is meant to cover damage to your vehicle in case of an accident but this option might be of limited value.
And as the name suggests, this third party insurance will cover damage to your car resulting from theft or fire. So if you’re in an area where either of these is prevalent, purchasing this policy will be helpful.
Note that since it doesn’t cover the medical bills of the other party, this type of third party insurance is also not a substitute for third party compulsory insurance. If you’re caught driving with this and without compulsory insurance, legal action might be taken against you.
Third party property damage is another variant of non-compulsory third party insurance, and this time, it only covers damage you might cause to another vehicle. It will also cover damage to your car in case you get hit by an uninsured driver, however, the cover might be limited in this scenario.
The benefits your insurer provides can have a significant impact on your overall third party insurance experience (and cost).
What you’re looking for is an easy-to-work with, flexible insurer that provides 24/7 assistance. That’s because accidents can happen any time, and most experts recommend reporting one to your insurer as soon as possible even if you’re at fault.
That’s because your insurer can then directly deal with the insurance company of your victim, sparing you the hassle and stress.
Finally, be sure to inquire about whether the insurer covers car modifications and accessories at the same price or whether it charges you extra for that. Another thing to keep in mind is that some insurers won’t cover any person other than the policy owner.
If you share your car with a friend or family, be sure to work with a company that will cover anyone driving the car!
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