Why third party liability insurance is important

This is a bigger deal than you think

Let’s imagine a little scenario. You have an old Toyota Corolla, which is your back-up. Trusty ol’ Betsy. She’s been there for you over the years and even featured as the kindly car that your kids learnt to drive in. Then, one day your youngest heir to the (non-existent) family millions parks the car up the driveway and hurries inside to ‘use the facilities’ (read: urgently go to the loo).

About 3 minutes later, a resounding crash echoes through the neighbourhood.

Unfortunately, your dear daughter forgot to put the handbrake on and Betsy sailed backwards out the driveway, into the neighbours’ garden wall. Surprisingly, Betsy is none the worse for wear (save a few scrapes) but the wall is kaput. It’s going to cost a few thousand to fix up, as well as a few batches of brownies to win back your neighbour’s goodwill.

This just 1 scenario where third party liability insurance is necessary.

What ‘third party liability’ means

To unpack this part of your insurance policy, we need to break it down. The ‘third party’ bit simply refers to anyone who isn’t you (the insured) or your insurer. Specifically, it’s the person affected by the incident involving your insured item (in this case, your car). Like the neighbour’s wall that Betsy crumbled to the ground.

The second part involves the word ‘liability’ which just means responsibility. So, when you put them all together, you can better understand the fact that ‘third party liability’ means that you’re personally financially responsible for damage that you cause to someone else or their property.

In the case of Betsy vs. the neighbour’s wall, this would mean that you’re legally responsible for paying to repair or replace your neighbour’s wall.

Why third party liability insurance is necessary

The first reason is the fact that accidents and unfortunate incidents tend to happen. It’s a reality. You don’t even have to be particularly adventurous or live a thrilling lifestyle… No matter how safe or boring you think your life is, you take risks every day. And because there’s simply no telling when an accident will happen, or to who, or how many people might be involved… It’s better to be prepared and make sure that you have the right cover.

The second reason is that third party costs can sometimes mount up to more than your own damage or loss. The expense of having to pay 1 or even 2 other people for these damages is actually quite frightening. The reality is that third party liability insurance will help you avoid masses of debt.

The third reason is that if you don’t have insurance to pay for the damages and losses incurred by any third parties and you can’t make a plan to pay out of your own pocket, then you might be taken to court. It’s not necessarily even out of anger or spite on the third party’s side… But they might be financially destitute because of the incident and feel that they have no choice but to do everything in their power to make you pay for the damages that you’re responsible for.

A lawsuit could ruin you for years to come. Also, there’s also the emotional and mental stress from a lawsuit that you can’t put a price tag on. Third party liability insurance is crucial.

Avoid crippling debt and get the right cover

Third party liability insurance is vital to any type of cover that you get, from business to car insurance.

If you’re uninsured because you think it’s too expensive, think about it this way… You’re insuring yourself against a potential lifetime of debt. It’s easy to get the cheapest cover possible so that you don’t have to compromise your budget. All you need to do is compare a handful of quotes from SA’s top insurers and make sure that they include third party liability cover.

When it comes to car insurance, for instance, you’ll find that most insurers offer at least 2 types of super cheap car insurance policies that deal primarily in third party liability. For instance, King Price offers third party, fire and theft car insurance AND third party liability only car insurance. Both of these are super cheap and will do the job, but just remember that the person whose property is being covered is NOT you. Only the third party involved (if you’re liable, that is) is covered.

At the end of the day, whether you’re considering comprehensive cover (which always includes liability cover) or are only looking for third party liability… A little cover is still way better than none at all! So, just click here for a commitment-free quote.