Car Insurance Basics: What Is Third Party Liability & Why You Need It (An Easy Explanation)


Jade Poole from I Write Words


When it comes to your car insurance contract, there might be some things in there you don’t quite understand. Which is why we have put together a simple guide to understanding one of the most commonly used terms - third party liability…

Car insurance is something most of us know we have to have (or should have), but don’t always understand.

As insurers, we pride ourselves in making vehicle insurance simple and easy to understand. We get that life is complicated as it is, so we make sure our insurance isn’t.

One of the most common questions we get is about third party liability - what it means and how it works when it comes to car insurance.

What Is Third Party Liability?

Okay then, let’s get into it…

The best way to go about understanding what this means is to break it up…

‘Third Party’ refers to anyone who is involved in a car accident that is NOT you or your insurer.

This can be someone else’s car or even the neighbours garden wall that your car hit in an accident.

Then, there’s the term ‘liability’. Liability is just a fancy word for responsibility.

This means that when you put all the terms together, you get a better understanding of what third party liability means - so you are then personally (and financially) responsible to pay for the damage you have caused to another person’s property (this is only if you don’t have third party insurance).

Why do I need third party liability cover when it comes to my car insurance?

Great question!

Cover for the unexpected damage

Firstly, you need this type of cover because you cannot predict when things go wrong, but you can plan for when they do.

What we mean by this is that you NEVER know when things might go wrong, when you might be involved in an accident and when you might cause damage to someone else’s property due to a car accident.

Every time you get behind the wheel, you are taking a risk.

Which is why it is better to be prepared for the unexpected.

Help cover the costs of third party damage

Third party cover helps cover the damage costs to the other party involved in an accident.

For example, if you are involved in an accident and your car hits your neighbour’s wall, you will then have to pay to fix your car and the wall!

Third party cover will help cover the costs of the wall, meaning you only have to pay for the damage done to your own car.

Third party insurance helps you to avoid crippling debt in situations like this.

Helps you to avoid a legal battle

If you don’t have the money to pay for the damage done to someone else’s property (cars, walls, anything that belongs to someone else), then they have the right to take you to court.

This is not always done out of anger or in spite of you, but rather because the third party might be left in financial debt to try and fix the damage and have no choice but to try and make you pay for the damages you caused.

Are you financially and mentally prepared to get involved in a lawsuit?

What is the best type of car insurance cover?

Third party liability cover will ONLY cover the damage costs done to another party. This means you have to pay for any and all costs done to your own car out of your own pocket.

This is why it pays to get vehicle insurance that is comprehensive - this is the BEST type of car insurance you can get!

Comprehensive car insurance will help to cover the costs of damage to both your car and the third party’s.

A lot of people do not get comprehensive car insurance because it is seen as too expensive. But with us, we have changed the game…

Oneplan Car Insurance - Insurance you can tailor to your budget

At Oneplan our car insurance is ALWAYS comprehensive.

And the best part?

It’s affordable.

We let you choose how much cover you want at the price you can afford.

How we do this is using our cover slider.

So, you select how much cover you want based on a percentage you choose, and we work out your premium based on this.

You can also change your cover amount whenever you want and press pause on your cover too!

Access, change and update your cover through our smart Oneplan App.

And if you have any questions, you can chat with one of our team members through our live chat function in the app!

Pretty great, right?

Make sure you are covered for the expected, unexpected and everything in between.

Want to switch to Oneplan? Have a look at these 6 simple steps.


Yours in uncomplicated car insurance,


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