Third Party cover
Based on the image you provided, let's clearly explain Third Party Cover in the context of motor vehicle insurance.
🛡 Third Party Cover Explained
In any insurance contract, there are two main parties: the insurer (the insurance company) and the insured (the policyholder).
A third party is any other person who may become linked to the insurance contract, usually because they are affected by an accident involving the insured.
đźš— What a Third Party Only Policy Covers
A standard Third Party Only policy covers the insured's legal liability towards other people in the event of an accident that arises from using their motor vehicle.
This cover includes:
* Property damage: Damage to other people's vehicles, buildings, or other possessions.
* Death and injury: Financial liability for the death or bodily injury suffered by the third party.
> In simple terms, if you are at fault in an accident, your third-party policy pays to fix the other person's car or cover their medical bills, but it does not cover any damage to your own vehicle.
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âž• Extensions to the Third Party Policy
A basic third-party policy can be extended to include coverage for the policyholder's own vehicle against the risks of fire and theft, usually for an additional premium.
These extended policies are often offered in the following combinations:
* Third party, fire and theft: This is a common upgrade, offering the basic liability cover plus protection for your vehicle if it is damaged by fire or stolen.
* Third party and fire: Liability cover plus protection for your vehicle against fire damage only.
* Third party and theft: Liability cover plus protection for your vehicle against theft only.
The text also notes that policies from the Ethiopian Insurance Corporation, like other policies, can generally be extended to cover other additional risks for an extra fee.