What is Third Party Liability Insurance?
A huge part of insurance protection is something that is called third-party liability coverage. What is third party liability insurance? Third-party liability insurance is coverage that is purchased by you, the consumer, from an insurance company, in order to protect against claims from other people (third party) for injuries or damages the first party may have caused. Bodily injury liability covers all medical expenses; hospital bills, lost wages, and also includes pain and suffering. One of the most common questions we got is: What is third party liability insurance? Third party liability insurance is important for those who have assets that need to be protected. Third-party liability coverage comes bundled into most homeowners, renters, and business policies and is usually required as part of your car insurance policy.
Why You Need Third-Party Liability Coverage
One of the main reasons for acquiring third-party liability coverage is because if you, your house, your car, your dog, your business, etc. manage to cause another bodily injuries or damage comes to a third party, you could be responsible. And there will be a very likely chance that a lawsuit will follow.
Litigation is common these days and you will be looking at serious expenses for both legal and any other settlements.
Common Types of Coverage
Most third-party coverage is required and built into your insurance plans.
This coverage is mandatory in all states and cover’s physical injury due to an accident that you (or the guilty party) is responsible for. Coverage extends to physical injuries, pain and suffering, and death.
Bodily injury coverage includes the following:
- Medical Expenses
- it will not only cover the costs of emergency services, hospital care, follow-up visits, but also includes costs of wheelchairs, walkers and crutches, etc.
- Legal Fees
- Liability coverage will include the cost of legal fees that are incurred and any judgements or settlements up to the policy limit.
- Lost Income
- If the driver who hit you and causes your injuries – and you are in need of medical attention that requires physical therapy or you are unable to work for weeks or months, this loss of income will be covered by the other person’s bodily injury liability coverage.
Third-party liability coverage helps pay for any damage that was done to your property by another vehicle. While we think of property damage as just being to a car or other entity, this also includes trees, fences, mailboxes, garages, etc. This is also considered coverage that is required. This is not designed to cover your medical bill or pay to repair your vehicle – this is solely for the purpose of damage to property.
Homeowners insurance pays to repair and rebuild your property should there be any accidents. Insurance coverage offers third-party protection against any claims of liability and covers most medical costs, lawsuits, pain and suffering, loss of wages, and death benefits.
Homeowners insurance covers the following:
- Medical Expenses
- Just like car insurance, third-party liability will help to cover medical bills of whoever is injured on a property. For example: if you slip on someone’s sidewalk, or fall down the stairs, or you are attacked by a dog on someone else’s property, the person who owns the property will be responsible for your medical bills.
- Pain and Suffering
- If you are injured on someone’s property, the liability portion of their homeowner’s insurance policy will cover pain and suffering costs.
- Loss of Income
- If your injury on someone else’s property keeps you from working, liability coverage will take care of your costs.
Most insurance companies offer what is called an Umbrella Policy. This policy kicks in when you reach the limits on your auto or homeowners policy. They like to think of it as extra liability protection. The wonderful thing about an umbrella policy is that they offer so much more liability coverage at very reasonable prices. Premiums can vary from $150-250 per year for $1 million in coverage.
Where to Get Third-Party Insurance
This coverage is usually bundled into many of the above policies we mentioned above – there is a good chance that you already have coverage in your auto, home, renters, insurance plans.
Liability coverage only pays out to the policy limit and making sure to set the right limits is extremely important with third-party liability insurance coverage.
If you are in need of a personal injury lawyer and have questions, please do not hesitate to contact our office.