Third Party Insurance – What It Is and Why You Need It
Third Party Insurance. Liability covered purchased by an insurer.
You might ask yourself: What is it, why is it important, and why do I need it?
One word: Liability.
Say for example that you own a lumber company. You are entrusted by the local city to transport lumber from Pennington to Davie. Your lumber truck gets into an accident, a building is destroyed, and someone is seriously injured. Your company is now liable for those damages. The damages costed you $ 3 million, and now your company is bankrupt.
What if you had had third party insurance before this all happened?
You would be safe! Insurance works this way: You pay a fee every month depending on your coverage. The more coverage you have the more insurance you can be covered for, the "less "iable you will be. And if a claim is filed, something called a "premium" will have to be paid for. Another word for a premium is a deductible. With insurance policies that have no deductible, you end up paying much more than if you did have a deductible.
Now, the next question you might ask is: Well I do not own a lumber company.
No lumber needed! Most states require third party insurance for cars and vehicles when driving a car. This type of insurance can cover personal injury, car damages, and external damages. The cheaper the insurance you pay per month, the less your policy tends to be.
How is my insurance amount determined? There are a number of factors: Location, make / model of car, your age, past driving history.
Location- If you are located in an accident prefecture area, your insurance will cost more. Age- If you are under the age of 25, your insurance will be almost double that of everyone else! Make / Model- Sports cars cost more money to insure. So do luxury cars. A station wagon will be a lot less to insure than would a Ferrari. Past driving history- If you are sooner to getting into accident, your insurance will cost a lot more than usual!
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