In Malaysia, third party insurance is the most basic insurance policy you can get. It’s compulsory under the Motor Vehicle Insurance Act to drive on the road. It’s more like a driving license to drivers; passports are to international travelers and wheels to cars. You can’t drive your car without it. In the insurance realm, the “first party” is you (i.e., the owner of the car), the “second party” is the insurer; however, “the third party” is everyone else. A Third Party policy protects you against any damages or deaths caused to the third party (i.e., another person), as well as loss or injury to a third party property caused by your car. In essence, a Third Party Policy provides you with the minor coverage level if you are involved in an accident. This policy does not cover any claim for damages to your car. Thus, Third Party cover is usually offered at a lower premium as compared with a Comprehensive Cover.
Why Invest In Third Party Insurance?
As mentioned above, in Malaysia, it’s compulsory to carry at least the most basic insurance plan, so many people have third party Policy But aside from it being compulsory and protecting you from third party claims, it also protects you against a significant portion of the lawsuit if the third party sustains serious injuries or property damage. A third party policy is a type of liability insurance usually part of automobile and home insurance policies. It covers bodily injury and property damage insurance.
How Third Party Insurance Works
Third Party insurance is a type of liability insurance acquired by a user (first-party) from an insurance company (second party) for coverage against the claims of another user (third party). In case of an accident, the first party is responsible for their damages or losses. It is irrespective of the origin of those damages. There exist two types of car third party liability coverage. They are:
- Bodily Injury Liability: This policy covers costs resulting from injuries to the third party. These injuries’ fees might include hospital care, lost wages, and pain and suffering due to the accident.
- Property Damage Liability: This policy covers expenses resulting from damages to or loss of third party property. An instance of this includes the fee to replace landscaping, mailboxes, and reimbursement for loss of use of a structure.
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How To Purchase Third Party Insurance
The process of acquiring Third Party Car Insurance is somewhat more complicated, as most insurance firms like to deal with Comprehensive Covers. It is the result of the rising hike in road accidents and claims cost. This had made the third party Covers less lucrative for insurance firms. Furthermore, it is relatively hard to estimate the worth of old cars required to work out the insurance expense. You should note that insurers add a “premium load,” which you have to bear in some instances. The “premium load” is an additional sum added to the insurance expense to reflect the higher risk. Some insurance organizations may require the driver to get different insurance coverage types to secure a third party Policy. When you want to raise your chances of getting a Third Party Cover, it is sensible to stay with one insurance company for both motor and non-motor coverage and keep up a decent history in all accounts.