Third-Party Insurance: What is it, how does it work, and when should you purchase it?

The Truth Is: Most People Only Think About Insurance… After the Crash

You’re driving peacefully, get distracted for a second, and… BAM!
You hit the car in front. You’re fine, but their taillight is shattered—and the bumper’s messed up too.

Do you know how much that repair can cost? Over R$ 5,000 depending on the vehicle. And if you don’t have third-party insurance, that entire amount comes out of your pocket.

That’s why today I want to explain—in a simple, straightforward way, based on years of experience—what third-party insurance is, how it works, and why you should seriously consider it.

What Is Third-Party Car Insurance?

Third-party insurance, technically known as RCF-V (Voluntary Civil Liability for Vehicles), covers the damage you cause to other people or their property in an accident involving your vehicle.

✅ It covers:

• Material damage (e.g., another car, gate, utility pole, wall)
• Bodily injury (e.g., injuries to pedestrians, cyclists, or passengers in other vehicles)
• In some cases, even moral damages (depending on your policy)

❌ It does NOT cover:

• Damage to your own car
• Theft, flooding, fire, or collision involving your vehicle

How Does It Work in Practice?

If you crash into another car and are at fault, third-party insurance covers:

• Repairs to the other driver’s vehicle
• Medical expenses for any injured parties
• Legal costs if you’re taken to court

🧾 Important: Coverage limits are defined when you purchase the policy. Most drivers choose between R$ 50,000 and R$ 200,000. The higher the limit, the greater the protection—and the cost too.

Real Case Example of a Third-Party Claim

Case 1: Minor Collision, Major Cost

Lucas, 28, was driving his 2021 Onix in São Paulo when he got distracted and rear-ended an Audi Q5. The damage to the Audi totaled R$ 14,000, and Lucas’s own car had R$ 3,200 in damages.

With third-party insurance:

• The insurer covered the full R$ 14,000 for the Audi
• Lucas only paid for his own car’s damage (R$ 3,200)

Without third-party insurance:

• Lucas would have paid R$ 17,200 out of pocket

When Is Third-Party Insurance Worth It?

If you’re on a tight budget, drive an older car, or don’t want full coverage right now, third-party insurance is the bare minimum you should have.

It’s ideal if you:

• Drive a car with low to medium market value
• Can’t afford comprehensive insurance right now
• Frequently drive in high-traffic urban areas
• Want to avoid legal trouble in case of an accident

How Much Does Third-Party Insurance Cost in 2025?

Prices vary depending on your profile and location, but overall it’s much cheaper than comprehensive insurance.

Driver Profile	City	Avg. Annual Cost (R$)
Male, 45, countryside	Sorocaba – SP	R$ 450
Female, 38, capital	Belo Horizonte	R$ 620
Young, 22	Rio de Janeiro	R$ 890

📊 Sources: Porto Seguro, Azul Seguros, Liberty – Real quotes, June 2025

Benefits of Having This Insurance

Excellent Cost-Benefit
You pay little but avoid huge expenses if you cause an accident.

Protects Your Assets
You won’t need to sell your car or take out a loan to cover someone else’s damage.

Legal Peace of Mind
You don’t have to deal with the victim directly or face lawsuits.

Expert Tip

If possible, opt for a higher coverage limit—R$ 100,000 to R$ 150,000. This gives you enough protection even if the damage involves a luxury car or victims with high medical bills.

💡 Even if you already have comprehensive insurance, check your RCF coverage limit. Many policies offer a low default limit, and it’s often worth increasing.

It’s the Minimum Every Responsible Driver Should Have

You may choose not to protect your own car, but you must protect others—and yourself—from potential lawsuits.

Third-party insurance is affordable, effective, and could save you from a major financial and legal headache.