have you ever heard of third party insurance? See how third-party insurance works and what it covers when you rent a car.
let’s say you’re ready to rent a car. In the middle of the reservation process you read the words “third party insurance”, but you don’t know what it really means or what it covers. you think to yourself do I need this?
To answer this question, let’s first take a look at what liability insurance is, as this will help you understand how it applies to car rental.
Basically, third-party insurance protects you in the event of any damage caused to someone else’s property; that’s the third, of course. a real life example would be if you are doing some work on your house and you accidentally damage your neighbor’s car with a brick. liability insurance would cover that.
so… how does that work when it comes to car rental?
what is third party rental car insurance?
Third party car rental insurance can cover damage caused to anyone or anything besides you and the rental car itself. In the event of an accident, for example, it can cover damage caused to the other car involved, to the passengers inside it, or to other people’s property.
Also, you should know that there are many different names for third party insurance, such as:
- ep – extended protection
- lp – liability protection
- sli – supplemental liability insurance
- tpl – third party liability
- ali – additional liability insurance
- the cost of repairing any damage caused to someone else’s property (for example, a fence)
- the cost to repair any damage done to the other car involved in the accident
- the cost of third party injuries (for example, medical bills and general costs)
- the cost of legal fees
- damage caused to the rental car
- damage or loss of valuables inside the rental car
- injury to renter or renter’s passengers
- alamo extended protection (ep): $1 million
- civil liability insurance supplement (lis): $1 million
- company supplemental liability protection (slp): $1 million
- national supplemental liability insurance (sli): $1 million
Different rental companies in different parts of the world may refer to it in a particular way and may have slightly different coverages, but they all protect the third party involved in the incident.
Read more about all types of car rental insurance.
what does third party liability cover?
Here’s a list of things third-party insurance may cover:
Please note that, as mentioned above, these insurances may have different names and cover third parties to different extents.
What does third party liability not cover?
Basically, the third party insurance will not cover anything related to the rental car itself. there are different insurances for that, such as collision damage waiver (cdw), loss damage waiver (ldw), and collision damage insurance (cdi), which can be purchased separately.
Should I take out third-party insurance?
As with any insurance, we never expect to use it until it is needed. When it comes to car rental, there’s really no way to know if you’ll need it or not, and even if you plan to drive around places you’re familiar with, you may run into unexpected situations.
As a general rule of thumb, we always recommend purchasing insurance as it puts your mind at ease when driving a rental car, whether in your own city, country or abroad.
However, what you can do is check your existing insurance coverage. Sometimes your regular auto insurance may also cover third-party damage for rental cars, which means there’s no need to purchase additional insurance from the rental company.
Also know that third party liability coverage is required by law in most countries. However, in the United States, the minimum coverage can be quite low, meaning that if you cause more damage than it covers, you will have to pay for it yourself. For this reason, some rental companies offer supplementary civil liability insurance with greater coverage.
These are some rental companies and the amount covered by their supplemental liability insurance:
Do you still have questions about civil liability insurance for rental cars? leave a comment below!