Third-party insurance generally covers the legal liability for damages or injuries caused to others by the insured. In the context of car insurance, it typically includes:
- Damage to other people's property, including their vehicles.
- Medical costs or injuries suffered by other people caused by your vehicle.
- Damage caused by a load falling off your vehicle or a trailer towed by your vehicle.
- Legal fees and court-ordered settlements related to damages caused to third parties.
However, it does not cover damage to your own vehicle or belongings. More comprehensive versions of insurance are needed for coverage of your own vehicle's damages, theft, collisions, or other risks. Third-party insurance is usually mandatory for vehicle owners and is the most basic and cheapest form of car insurance since it only protects against claims from third parties, not your own losses. Limits are set by law for coverage of damages to persons and property. In summary, third-party insurance covers the insured's legal liability for loss or damage caused to others, but not the insured's own damages or losses.
