Third-party liability insurance turns around the concept of protection and, indeed, of responsibility: in this case, damage arises from the insured party's unintentional behaviour with respect to other persons, and policies thus aim to provide the financial protection to reimburse the claim that the insured party would not otherwise have.
In this context, the clearest and most widespread examples are third-party liability policies for drivers of vehicles (cars, motorcycles, etc.). In most countries this type of insurance is compulsory given the high social costs associated with the number and severity of accidents.
One of the most widespread models for calculating premiums is the bonus – malus algorithm, which tends to reward good driving performance and penalise poor performance based on an individual's claims history. Today, more advanced models for calculating rates take into account other variables, such as kilometres driven or driving style, thanks to telematic tools installed on vehicles.