Understanding Insurance Liability Only

Insurance is a financial product that provides protection against unforeseen events. There are different types of insurance policies available in the market that cater to individual needs. One such policy is the “insurance liability only” policy. This article will explain what this policy is, how it works, and what its benefits are.

What is Insurance Liability Only?

Insurance liability only is a type of insurance policy that covers the policyholder’s legal liability to third parties for damage or injury caused by the policyholder’s vehicle. This policy is mandatory in most countries for anyone who owns a vehicle.

The liability insurance policy covers the cost of damages and injuries to third parties that are caused by the policyholder with their vehicle. The policy does not cover the policyholder’s vehicle or any damage caused to it. It only covers the liability of the policyholder towards third parties.

How Does Insurance Liability Only Work?

The insurance liability only policy works by providing financial protection to the policyholder against any legal claims made by third parties for damages or injuries caused by the policyholder’s vehicle.

If a policyholder causes an accident and is found to be at fault, the liability insurance policy pays for the damages and injuries suffered by the third party. The policyholder is only responsible for the deductible amount mentioned in the policy. The insurance company takes care of the rest of the amount.

The policy covers expenses that are related to legal fees, court costs, and compensation to the third party who has suffered damages or injuries. It also covers the policyholder’s liability for damage caused to public property, such as buildings or streetlights.

What are the Benefits of Insurance Liability Only?

There are several benefits of having an insurance liability only policy:

• Legal Compliance: The policy is mandatory in most countries for anyone who owns a vehicle. Hence, by taking this policy, the policyholder is complying with the law.
• Financial Protection: The policy provides financial protection to the policyholder against any legal claims made by third parties for damages or injuries caused by the policyholder’s vehicle.
• Peace of Mind: With this policy, the policyholder has the peace of mind that they are protected against any legal claims made by third parties for damages or injuries caused by their vehicle.

FAQ

What is Covered in Insurance Liability Only Policy?

The insurance liability only policy covers the policyholder’s legal liability to third parties for damage or injury caused by the policyholder’s vehicle. It covers expenses related to legal fees, court costs, and compensation to the third party who has suffered damages or injuries. It also covers the policyholder’s liability for damage caused to public property.

Does Insurance Liability Only Cover My Vehicle?

No, the insurance liability only policy does not cover the policyholder’s vehicle or any damage caused to it. It only covers the liability of the policyholder towards third parties.

Is Insurance Liability Only Policy Mandatory?

Yes, the insurance liability only policy is mandatory in most countries for anyone who owns a vehicle.

What is a Deductible?

A deductible is the amount that the policyholder is responsible for paying out of their pocket before the insurance policy covers the rest of the amount.

Conclusion

Insurance liability only is a type of insurance policy that covers the policyholder’s legal liability to third parties for damage or injury caused by the policyholder’s vehicle. This policy is mandatory in most countries for anyone who owns a vehicle. It provides financial protection to the policyholder against any legal claims made by third parties for damages or injuries caused by the policyholder’s vehicle.