Third Party Car Insurance Explained (Texas)

When you’re involved in a Texas car accident, understanding how third-party car insurance works can make all the difference in protecting your financial security.

That’s why in this post, we’ll break down what third party car insurance is, the essentials of filing a third-party insurance claim, and what it covers. Whether you’re a driver at fault or the injured party, this guide will help you understand the protections available under Texas law.

Let’s begin.

What Is Third Party Insurance?

Texas law requires drivers to carry basic insurance cover on any motor vehicle licensed to be on the highway.

As the policyholder, you pay premiums to the insurance company as the insured party in exchange for protection against third-party liability insurance claims if you cause an accident.

In Texas, drivers must carry liability insurance, commonly known as 30/60/25 coverage.

If you are found negligent in a car accident, your basic car insurance policy will pay for the following:

• $30,000 per person for bodily injury liability,
• $60,000 per accident for total bodily injury, and
• $25,000 for property damage liability.

While these amounts may appear sufficient, medical bills and damage coverage for newer vehicles may quickly exceed these limits.

Another type of insurance policy, called first-party insurance coverage, allows you to file a claim with your own insurance provider to cover your costs from an accident.

Third Party Claims Explained

Car accidents often involve more than one motorist, and more than one driver may be at fault in a Texas car accident. Businesses, government entities, and manufacturers may also be responsible for an accident.

Other forms of third-party coverage may apply in these incidents. The parties in a third-party insurance claim are as follows:

• As the policyholder, you are the first party.
• The insurance company is the second party in an insurance claim.
• The at-fault driver, or the negligent party responsible for your damages, is the third party.

Texas follows modified comparative negligence laws, which reduce your compensation in a third-party auto insurance claim by your percentage of fault in the accident.

You may hold no responsibility for the accident, or the insurance company may determine a portion of the fault is attributable to your actions.

As a driver, you cannot claim compensation for your costs if you are more than 50% at fault in a car accident. This is particularly important in an at-fault state like Texas.

How to File a Third Party Insurance Claim

To file a third-party insurance claim in Texas, you will need some essential information. A car accident scene can be chaotic and confusing, so obtaining a copy of the police report following a Texas car accident is crucial.

To file a claim, you will need the name and phone number of the third party’s insurance company.

You will also want to contact your own insurance company to inform them about the accident and the claims process. The third party’s insurance provider will assign a claims adjuster to your case, who will be responsible for thoroughly investigating the accident and offering a fair settlement for your damages.

However, insurance companies often aim to reduce compensation, which can save them money while costing you.

The third-party liability insurance covering the other driver should provide a written explanation for their compensation decisions. A reduction in your third-party claim may occur due to the following:

• You were assigned a higher percentage of fault in the accident.
• You didn’t properly or fully document your damages.
• The insurance company denied their insured driver’s responsibility for the accident.
• The insurance company claimed that your property damage or medical issues were pre-existing.
• The insurance provider insists that your damages are less impactful than you claim.

What Third Party Insurance Does and Does Not Cover

Many Texas drivers are unsure what compensation may be available to them following a car accident. Third-party insurance covers include:

• All medical bills,
• Lost wages while recovering,
• Other expenses such as travel costs to appointments, and
• Physical pain and emotional suffering.

Third-party coverage protects you up to the allowed coverage amounts, preventing out-of-pocket payments. However, third-party insurance does not cover damages under the following exclusions:

• Weather-related events such as hail damage,
• Vehicle theft,
• Vandalism or deliberate acts of destruction, or
• Pothole damage to your car.

Additional insurance coverage, such as comprehensive insurance, may be required for these situations. The Texas auto insurance information guide referenced above discusses the types of auto coverage you may purchase in addition to liability coverage.

Knowing your insurance needs based on your vehicle use, where you live, and your daily circumstances can help determine your insurance cover needs.

In short, third-party insurance can offer financial protection, whether you are the injured party in a car accident or the person responsible for causing injuries. If you have more questions concerning Texas auto accidents, feel free to contact our experienced Houston car accident lawyers.