What is a Third Party Car Insurance Claim

December 28, 2022

What is a Third Party Car Insurance Claim

Car insurance is one big pile of confusion for the people who are not well-versed in it. Each state has its own laws regarding auto insurance policies, mandatory minimum coverage limit, etc. But things get even more confusing when there are multiple terms for the same thing. 

For example, there are car insurance endorsements, which is just another term for auto insurance add-ons. To help get rid of these confusions and make you well-versed in the vast and complex topic of auto insurance, let’s take a look at what a “Third-party” car insurance claim is. 

Third-Party Car Insurance Claim

A third-party auto insurance claim is another term for a liability insurance claim. It is one of the most common types of insurance claims all over the world. When you get in a car accident, and the accident is someone else’s fault, you can claim their liability insurance. 

When the other driver is at fault, and you claim their liability insurance, it covers all the cost of the accident for you. The damage to your car due to the accident will be repaired using the claim money. Not just that, but their liability coverage will also cover the cost of medical treatments needed by you and other passengers in your car. 

The same is applicable when you get in a car accident, and it is your fault. The other driver (the third party) can claim your (first party) liability insurance, and your car insurance company (second party) will cover the cost of car repairs and medical treatment. 

But as is the case with everything related to car insurance, nothing is as simple or straightforward. Let’s take a look at all the different complex parts of a third-party insurance claim, the process of making a liability insurance claim, and everything else related to it. 

Liability or Third Party Car Insurance

Liability insurance is the most important car insurance policy that every driver must have. It is mandatory to have liability insurance to drive a car in 49 states legally. Operating a vehicle without one is not only a felony that can get you heavy fines and even prison time, but it can lead you into a financial abyss. 

Car accidents are costly. Both the drivers and their vehicles are damaged in the accident, and most of the time, one of them is responsible for the accident. The at-fault driver has to pay for the medical treatments and car repairs of the other driver along with their own. 

The cost of an accident can range from anywhere between $50,000 to even a million dollars. If you are at fault in a car accident and do not have liability insurance, you’ll have to pay hundreds of thousands of dollars, if not millions, for the repairs, medical treatments, legal fees, etc. 

Hence, to avoid such situations, States have made it mandatory for every driver to have liability insurance. Some states have additional requirements, which we will mention later. 

Things to Note

Just getting liability insurance is not necessary. Every state has its own minimum coverage limit for liability insurance. It means that drivers must have liability coverage with a coverage limit equal to or more than the state’s minimum coverage limit. 

For example, Illinois has a minimum coverage limit of 25/50/20, meaning that $25,000 is the minimum requirement for the injury of one person, $50,000 for the injury of more than one person in an accident, and $20,000 for the cost of property (and car) repairs. 

While you can have liability coverage with the exact coverage limit, it is not recommended because car accidents are costly, and it is rare that the cost of the accident will always be under the coverage limit. 

Auto insurance with a higher coverage limit will cost more. It is why you should compare all the auto insurers before purchasing a policy. For example, if you are a resident of Illinois, search for the cheapest car insurance in Illinois, compare all the options and select the one that suits your needs the best.

How to Claim Liability Insurance

Claiming third-party insurance depends on whose fault the accident was. The insurance companies of both drivers will investigate the accident to determine whose fault it was, and once the conclusion is reached, the claim is approved. 

The best way to fasten this process is by having photographic evidence of the accident. Dash Cams that record the roads are one of the most essential driving add-ons you can have that help a lot during the insurance claim process. 

If you get in a car accident with someone and the accident was the other driver’s fault, then make sure to get all the essential information to ensure a smooth and fast insurance claim process:

  • Name
  • Phone number
  • License and Registration 
  • Car information
  • Their auto insurer
  • Photos and videos of the accident and the damage to the car
  • Police Report 

Note: A police report is essential for an insurance claim. Many auto insurance companies will reject the claim if there is no police report. So after you get in an accident, call the authorities as soon as possible. 

Another critical thing to do is inform your car insurance company, even if the accident was the other driver’s fault. Telling your car insurance company will make the insurance claim process easier for you. 

Your insurance company will deal with the at-fault driver’s insurance company to get your claim processed.  

What if the Driver at Fault is Uninsured?

There are over 32 million uninsured drivers in the US, which makes you bumping into one (literally) very likely. Since they do not have liability insurance, you can sue them, but you still need to pay for the vehicle repairs and medical treatments. 

Having uninsured motorist coverage can help in such situations where the driver at fault is uninsured. You can claim the UM policy to cover the cost of the accident. Many states have made uninsured motorist coverage mandatory. 

But in case you do not have it, you can claim collision insurance to cover the cost of vehicle repairs and a personal injury protection plan for the cost of medical treatment. Staying insured completely is the safest way of driving. 

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