When it comes to vehicle insurance, third-party insurance is usually less popular. Some people believe that comprehensive car insurance is the only type of insurance that’s necessary or worth a monthly premium. While this may make sense for some people, it won’t help in every type of budget. Third-party insurance is a great, and more affordable option for those who don’t drive often or have a low-value vehicle.
What is third-party insurance?
Third-party insurance is a type of insurance that covers the cost of damage in case of an accident that is your fault. Say for example you’re driving to work or just going about your usual activities and then you space out and end up hitting the car in front of you, or you’re driving to the supermarket around the corner, running a few errands and then reverse into another car while leaving the parking bay: you’ve just been responsible for causing a minor accident.
That’s where third-party insurance comes in. Third-party insurance covers the costs of the damage caused by you to another person’s vehicle or property. The “third-party” in the matter is the person who suffered the damage to their vehicle or property as a result of your actions.
If you are responsible for an accident, then it’s your responsibility to cover the cost of repairs and loss. The person whose vehicle got damaged by you will likely demand financial coverage for the repairs from you, then the third-party insurance provider will settle the claim.
Does that mean my vehicle gets covered too?
No, unfortunately not. Just because the person whose vehicle you damaged gets covered by the third-party insurance, doesn’t mean yours does. The damages caused to your own vehicle will have to be paid for by you with or without third-party insurance.
What’s the difference between third-party insurance and comprehensive insurance?
As mentioned above, third-party insurance is insurance cover for damage to the other person’s vehicle only.
Comprehensive car insurance covers the repair & damage costs to your car and the other person’s car involved in an accident. Comprehensive cover can be quite costly and not everyone can fit it into their monthly budget. For this reason, third-party insurance is a more affordable option for people who have an older low-value car, an already paid-off car, or if you don’t drive very often and only use your car for short-distance driving.
You never know when you might get involved in an accident and the costs to repair the damage to both your car and the person(s) involved can be devastating.
Even though this type of insurance only covers the damage to the other person’s car, it’ll be extremely helpful in a case where the car you damage is the latest Mercedes-Benz… or even worse, a Lamborghini! But that doesn’t mean the third-party insurance will cover the full cost to repair amount.
There isn’t one standard third-party insurance cost, so do your research to find the best possible coverage available that is within your monthly budget.
Get a quick vehicle or home contents insurance quote from us on: https://qualityquote.co.za/car-insurance-quote/