Automotive Insurance and Third Parties

When you are traveling in your vehicle of choice, you are likely thinking about what needs to be done when you arrive at your destination. Millions of Americans travel by car each day when commuting to work and make it back home without any accident. Each licensed American took the proper steps to earn the right to purchase and drive an automobile on any permitted road in the nation. With this said, even people who are experienced drivers are liable to make mistakes and cause accidents. When two parties are engaged in conversation after an accident occurs, they both usually have insurance providers that will help pay for any damages. The concept of automotive insurance directly relates to third party coverage.

Third-Party Insurance

In terms of automotive insurance, you are considered the first party, and your insurance provider assumes the role of a second party. Both parties created an agreement to do business with one another, and the terms are understood. When a car accident occurs with another party, the person you crashed with becomes a third party. Since your insurance policy does not cover this individual, third party coverage protects you from any liability if you were not the party that caused the damages. If the opposite scenario occurred, you will become the third party in respect to the other parties insurance policy.