Insurance Encyclopaedia

Third-party liability cover

Think of it as protection for everything that your car might damage while you are driving it, except for your car itself.

What does third-party liability cover?

Third-party liability protects you when a third party lays a damage claim against you after you are in a car accident where you damaged their car or property and they hold you legally responsible to cover the cost of their damage. Most insurers also cover you in instances where you cause damage to other people’s stuff, even if you are driving a car that isn’t the one you’ve insured with them.

Is third-party liability insurance compulsory?

In many countries all car owners are required to have third party liability insurance by law. However, in South Africa it is not required by law.

What is the risk if I do not have third-party liability insurance?

The risk is that you drive into the back of a Ferrari 250 GTO and the owner holds you legally liable for the repairs and it ends up costing you a million or two.