First-party, second-party and third-party - if you are a prospective first-time car insurance policyholder, it can be quite confusing. What it is and how is it different from comprehensive insurance? Knowing this ensures that the focus is more than just about car air conditioner smells.
Most of us instinctively think of damage to our own vehicles when we think of insuring our cars. It is probably the primary reason we want to cover in the first place. Should anything happen to our cars in the event of an accident, theft, fire, damage or heaven forbid - come hail or hijackings - we had like to know that is not the sum total of our loss, as some financial ground can be recovered.
Despite of being expensive and having excesses, comprehensive insurance is a better option. Other insurance policy options like the third-party or third-party only, theft and fire don not cover your vehicle if deemed your fault. A comprehensive cover, on the other hand, covers everything regardless of who is at fault. This can be an advantage if your car was also damaged during the accident or if you were at fault.
If you prefer to use public transport instead of driving your car, the probability of you causing an accident is next to zero. Let us say in an unfortunate event it happens that you cause the accident, you become the first party, your insurer becomes the second party and the person suffering from your actions is the third party. This option is very expensive if it happens that there is bodily harm caused by the accident.
A third party is anyone who would have endured loss or injury caused by the first party. This can be another driver of the car damaged or a homeowner if you would have crashed into someones yard. Even though it can be anyone, it is important to know that there are exclusions of certain individuals from the definition of a third party in the policy. The individuals excluded that they are family members. No damage can be covered if you damage a family members car.
This kind of insurance definitely does not cover you and the damage sustained to your car in an accident. You would consequently have to pay to fix your car out of your own pocket. But all too often in life, things are not black and white? What happens if the fault is mostly yours but not entirely so? For example, what happens if you reverse out of your driveway into a neighbor is car who is parked in such a way that it violates parking space codes?
What is the neighbor should not have been parked in harms way in the first place? Well, then that individual has contributed to the making of the accident, essentially. In this case, an apportionment of damages claim will be assessed.
It will be decided what percentage of blame you are responsible for, and what your neighbor, is responsible for. This will then determine the amount of damage claim in monetary terms each party owes the other. In this scenario, when a third-party claim is filed against you, it is up to you to lay a counter third-party claim.
Most of us instinctively think of damage to our own vehicles when we think of insuring our cars. It is probably the primary reason we want to cover in the first place. Should anything happen to our cars in the event of an accident, theft, fire, damage or heaven forbid - come hail or hijackings - we had like to know that is not the sum total of our loss, as some financial ground can be recovered.
Despite of being expensive and having excesses, comprehensive insurance is a better option. Other insurance policy options like the third-party or third-party only, theft and fire don not cover your vehicle if deemed your fault. A comprehensive cover, on the other hand, covers everything regardless of who is at fault. This can be an advantage if your car was also damaged during the accident or if you were at fault.
If you prefer to use public transport instead of driving your car, the probability of you causing an accident is next to zero. Let us say in an unfortunate event it happens that you cause the accident, you become the first party, your insurer becomes the second party and the person suffering from your actions is the third party. This option is very expensive if it happens that there is bodily harm caused by the accident.
A third party is anyone who would have endured loss or injury caused by the first party. This can be another driver of the car damaged or a homeowner if you would have crashed into someones yard. Even though it can be anyone, it is important to know that there are exclusions of certain individuals from the definition of a third party in the policy. The individuals excluded that they are family members. No damage can be covered if you damage a family members car.
This kind of insurance definitely does not cover you and the damage sustained to your car in an accident. You would consequently have to pay to fix your car out of your own pocket. But all too often in life, things are not black and white? What happens if the fault is mostly yours but not entirely so? For example, what happens if you reverse out of your driveway into a neighbor is car who is parked in such a way that it violates parking space codes?
What is the neighbor should not have been parked in harms way in the first place? Well, then that individual has contributed to the making of the accident, essentially. In this case, an apportionment of damages claim will be assessed.
It will be decided what percentage of blame you are responsible for, and what your neighbor, is responsible for. This will then determine the amount of damage claim in monetary terms each party owes the other. In this scenario, when a third-party claim is filed against you, it is up to you to lay a counter third-party claim.
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