Third party property damage limit
During a recent radio discussion on an Accra-based radio station, Kwesi, a motorist, was called in to pour out his frustration regarding damage a drunk driver caused to his vehicle.
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According to him, the offending driver was put before an Accra motor court and consequently fined GH¢1,000. Five months after the court proceedings, Kwesi is yet to hear from the offending driver’s insurer, even though he personally reported to the insurer a day after the accident.
Indeed, the offending vehicle had a third party cover, with a Third Party Property Damage Limit (TPPDL) of GH¢1,000 which implies that the insurer will only be liable to pay compensation not exceeding GH¢1,000 in lieu of fixing the damage to Kwesi’s vehicle.
Any excesses thereafter, would have to be personally borne by the offending driver or vehicle owner.
On the same radio discussion, a lawyer panelist, who demonstrated his in-depth knowledge on matters of insurance, explained that in spite of the court fine, the offending driver could still resort to his insurer to take care of repairing Kwesi’s vehicle, with due regard to the vehicle’s TPPDL. This piece, therefore, provides further details on TPPDL.
What is TPPD Limit?
The Third Party Property Damage Limit is particularly relevant in motor, public liability and property insurance policies. The primary essence is to provide a limit of compensation to third party claimants following a damage or loss to properties.
In motor insurance, for instance it provides compensation to a third party in lieu of an insured’s vehicle causing damage to a third party or his/her property. Thus, in such events, the insured will fall on his/her insurer rather than paying from his/her own pocket. This, however, comes with certain exclusions and compensation limits. Currently, the standard limit is GH¢2,000, but increments may be allowed based on extended conditions.
What motorists must know
Motorists must note that, generally, driving without a licence or under the influence of alcohol may vitiate the right to compensation in the unfortunate event of accident or damage to their vehicles.
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This may, however, be underpinned by the particular details of the policy.
Essentially, a third party policy will cover damage that occurs to another person or property other than the insured or his/her vehicle, but which arises from the action or inaction of the insured. In this regard, the policy only applies compensation/repairs to third party victims whose damage is deemed to be the fault of the insured.
Thus, TPPDL is specifically to protect and prevent the insured from being directly responsible for the medical expenses and property damage repairs of a third party.
Unfortunately, this is not always the case, as the costs of repairs to damaged property often far exceed the limit of liability under most third party insurance policies, particularly in our part of the world, where TPPDL is usually inadequate. The insured, therefore, becomes responsible for the excess cost (i.e. beyond the TPPDL) of damage repairs.
Advice to vehicle owners
It is imperative for motorists with third party insurance to immediately notify their insurers about damage, injuries or even deaths caused to third parties by their vehicles.
Similarly, where the motorist is rather the victim of the damage, particularly by another vehicle, the faulting vehicle’s insurer must be immediately notified in order that the insurer will advise on the appropriate steps to receiving a compensation or having the vehicle repaired.
In some cases, a court may impose a fine on the offending driver, but this does not absolve that driver and his insurers from meeting their legal obligations of having to repair the damaged vehicle and/or paying a compensation. It must, however, be noted that the TPPDL of the offending driver will determine the extent of liability of the insurer.
Beyond the standard TPPDL of GH¢2,000, however, motorists or the insuring public also have the option to request an increment of their choice, to which, additional premium may be payable such that in the event of damage to third party properties, the amount under the TPPDL can adequately repair the damage.