Third party car insurance definition

Written by leah waldron-gross Google
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Third party car insurance definition
To drive in the United States, third-party car insurance is required. (luxury car - model toy car image by alma_sacra from Fotolia.com)

Third party car insurance is to the least expensive type of car insurance a driver can purchase. Deemed "third party" because it does not cover the first two parties--the policy holder and the insurance company--this type of car insurance meets most state minimum requirements.

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Coverage They Can Count On

Third party car insurance covers damage inflicted by the policyholder on other vehicles, their drivers and their passengers, as well as any other parties involved in the accident. Unlike automobile liability coverage, third party does not cover the policyholder's vehicle, his passengers, or himself.

Third Party, Fire And Theft

A more expensive but higher coverage-spectrum option is third party, fire and theft insurance, which covers all third party damage, as well as damage to the policyholder's vehicle due to fire or theft.

Minimum Third Party Coverage Requirements

Depending on what state you live in, the minimum coverage requirement for third party car insurance will vary, and may be further broken into vehicle and personal injury individual coverage requirements. Some states may also require minimum automobile liability insurance, which will cover the driver, or uninsured liability coverage, which covers any other uninsured drivers on the road.

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