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If a person injured in a motor vehicle accident for which you were responsible decides to claim compensation, your third party insurance provider may pay compensation on your behalf. In almost all States and territories, having a third party insurance cover is mandatory before you take your vehicle out on the road. A third party accident insurance policy provides financial and other benefits to any person who gets injured in a motor vehicle accident caused by your vehicle. If you do not have the compulsory third party insurance, you will nevertheless have to pay the injured person compensation for his medial expenses rehabilitation costs, loss of earnings and such other expenses and losses, out of your own pocket. When you purchase a third party insurance policy liability for the personal injuries which third parties sustain because of your fault is shifted to the insurance company. As a result, the insurance company will have the legal obligation either to satisfy the third parties’ claims if they decide to claim compensation or to reject their claims and litigate where necessary. Thus, having a third party insurance cover will be necessary, not just because law requires it, but because, it can give the driver peace of mind while driving. However, it is also important to note that third party insurance will cover personal injuries to third parties only. If you get injured in an accident which was caused by your own mistake, no compensation can be recovered under third party insurance schemes. Instead you will have to contact your medical insurer or claim other benefits you may be entitled to under the relevant state laws. Also, third party insurance does not cover damage to property as well, which means any vehicular damage or loss resultant from the accident must be borne by yourself. However, some insurance providers may give you the option to upgrade your third party insurance policy to include your own personal injuries as well as property losses.
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