And why would you use it in at-fault accidents?
Find The Right Insurance
Let our Perfect Policy Connectors do the work for you!(855) 909-2474Request a free quote
In the world of insurance, getting into an at-fault auto accident with another driver is the worst-case scenario. If you are at fault in the accident, you may be subject to a third-party motor vehicle claim, which is when a driver files a claim with someone else’s insurance provider and it has to pay for the other party’s damages. If you’re the subject of a third-party claim, aside from your own recovery and the repair to your car, your insurance provider must pay the other party’s expenses as well.
These expenses can include property damages, bodily injury, costs of medical bills, and lost wages, up to the limits you’ve set, after you pay your deductible. Beyond that, you’re responsible for damages out of pocket, after what your third-party insurance covers.
Let’s go deeper into the world of third-party motor vehicle claims.
Third-party car insurance is when you file a claim with another person’s insurance provider to pay for your car repairs, medical expenses, and related transportation while your car is being repaired. You’d file a third-party claim if you got into an accident and were not at fault. If the accident was your fault, the other person would contact your insurance provider for a payout.
If your insurance provider is paying the claim, you are a third party, and the party being paid is the first party. Vice versa if you are the party not at fault who is receiving the money from the third party.
Third-party car insurance doesn’t cover everything, even if you were found completely not at fault in an accident.
In other words, third-party liability insurance doesn’t cover what comprehensive coverage does, which includes damages to your car from everything but other cars. Learn more about comprehensive insurance.
Confused? We’ll break down the third-party car insurance claims process from start to finish, starting with filing a claim.
You have the right to choose your own repair shop, even if it’s out of network for the third-party insurer. Get an estimate from a repair shop to see how much the repairs will cost.
Things work a little differently if you live in a no-fault state. These are the no-fault states:
In Kentucky, New Jersey, and Pennsylvania, you can choose whether you want liability vs. no-fault insurance1.
In no-fault states, rather than you filing a claim with another insurance provider to cover your medical expenses, your own medical coverage will cover your personal injuries. However, the other party will still be responsible for property damage, just not bodily injury2. Learn more about the difference between no-fault and at-fault states in our auto insurance FAQs page.
If you have property damage and/or bodily injury coverage, you already have third-party insurance coverage and may not even know it. Of course, the cost of third-party auto insurance is as varied as the cost of auto insurance in general, depending on factors such as your driving history, type of vehicle, and number of coverages.
Still, if you get into an accident and it’s not your fault, you’ll be grateful for third-party insurance, especially if you live in an at-fault state. This type of insurance will give you peace of mind in the form of property damage and bodily injury liability coverage.
What states have no-fault insurance? Nationwide. (2022).
What Is A Third-Party Insurance Claim?. Allstate. (2020, May).