Understanding Third Party Insurance
The term third party insurance is usually used in the context of the liability insurance coverage that someone has who has caused injury or loss to you.
If, for example, a next door neighbor starts a fire that spreads onto your property and burns your house down, than the neighbor’s liability insurance, such as their homeowners or other liability policy, would be responsible for paying for your loss or damage. Other, often larger, examples would include insurance for the liability of a product manufacturer for causing environmental damage or water or soil contamination resulting in millions of dollars of bodily injury or property damage losses to entire neighborhoods. Likewise for companies that manufacture products that cause cancer or other diseases.
(If, in addition to the third party coverage, you also have your own (first party) insurance, you should determine the pros and cons of you submitting a claim to your own insurance company. In the fire example above, for example, submitting a fire loss claim to your own homeowners insurance company rather than just proceeding against the third party and their carrier.)
Understanding third party insurance issues is crucial to being able to recover insurance money for the losses a victim has suffered.