What is third-party liability and why do you need it?

Otherwise known as TPL, third-party liability is a definite must-have for car owners.

What is third-party liability and why do you need it?

You will be required to get Compulsory Third Party Liability Insurance otherwise known as CTPL, whenever you register your car. It is illegal to drive around with an unregistered car, and the Land Transportation Office (LTO) will now allow you to register your vehicle if it doesn’t have the minimum requirement, known as third party liability (TPL).

Just what is TPL though? Let’s run down the basics of the most basic insurance policy. 

“Third Party Liability”

As the name suggests, this type of insurance policy will cover the other person’s damages in the event of an accident. The beneficiary of this policy would be the person that you hit, in other words, not the policyholder. This means that if you bump someone’s car, the damage on that someone’s car will be covered by the policy, and not the damage on your own automobile. 

The most affordable policy

Because it is mandatory and has limited coverage, a third-party liability is often priced lower than comprehensive insurance policies. It protects you from paying out of pocket when something does happen to another motorist, however, you will be left to pay for your own damages unless the other person has a policy that can cover for you, and you’re not at fault for the accident. 

Why do you need it?

Investing in any insurance policy is a financially responsible decision to make, and TPL policies are a gateway to better policies with greater coverage. First of all, you will need this policy to register your vehicle in the country. The reason for this is to be able to protect other vehicles and pedestrians on the road and beyond. Secondly, it helps you keep your finances in check if you do find yourself having to pay for someone’s repairs from an accident.