Auto Liability Insurance: What is it and what does it cover?

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Category: Blog Comparator
Tag: #Insurance
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What is RCA insurance?

RCA (Automobile Third Party Liability) insurance is a contract between the insured and the insurance company that covers material or physical damage caused by the vehicle to third parties in the event of an accident. The agreement requires the insured to pay a premium, which is calculated annually.

  • Car insurance, required by law, covers the vehicle even when it is parked.
  • If the car is not used and is kept in a private place (e.g. a garage), the contract cannot be stipulated .
  • However, it must be insured , even if not used, if parked in a public place .
  • Without third-party liability insurance, it is impossible to drive a motor vehicle in Italy .

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The maximums

If the vehicle is properly insured, any damage caused by an accident will be compensated by the company up to the limits set by a maximum coverage , the maximum amount (defined at the time of signing the contract) that the insurance company will pay in the event of an accident. The minimum coverage, guaranteed by law, is currently €6,070,000 for personal injury and €1,220,000 for property damage . Above these limits, the insured will be liable with their own assets. Higher coverage limits may also be available, which correspond to a higher insurance premium paid by the insured.

What does it cover?

The compulsory third party liability insurance policy includes insurance coverage for:

  • Damage caused to third parties by the circulation of the vehicle and any trailer attached to it;
  • Damages unintentionally caused to third parties by passengers during the movement of the vehicle;
  • Damage caused to third parties during the circulation of the vehicle unlawfully driven by minor children without the knowledge of the policyholder;
  • Material damage caused to third parties by car fire ;
  • Damage caused to third parties during loading or unloading of the vehicle without the aid of mechanical means;
  • For driving schools: damage caused to third parties while the student is driving, provided that a qualified instructor is present;
  • For vehicles rented for various reasons: damage to property belonging to third parties transported.

What doesn't it cover?

We have said that third-party liability insurance covers damage caused by the insured's vehicle to people, animals, or property following an accident, but does not guarantee coverage for any physical injury suffered by the driver who caused the accident. In certain cases, the insurance company, while required to compensate the injured party, can demand reimbursement of the amount paid . In the policy contract, these are indicated as recourses . In other cases, coverage is not applicable: these are called exclusions; the Contractual Conditions list all the cases not covered by the third-party liability insurance contract. Until 2012, third-party liability insurance policies enjoyed the so-called tacit renewal . From January 1, 2013, this automatic renewal for the following year was definitively abolished by the Development Decree bis .

The advantages for the contractors

There are many advantages: first and foremost, the freedom to switch insurance companies without worrying about restrictive contractual clauses. And finally, increased competition in the market has forced insurance companies to revise their prices.

Published: 2020-02-26From: Matteo Belfiglio

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