Liability coverage is one of the most important aspects of your auto insurance policy, and it is included, to some extent, in every auto insurance policy in the U.S. That's because each state has some sort of mandatory liability coverage law in place for its drivers. Without liability coverage, you could be susceptible to lawsuits in an attempt to recover the cost of damages and medical expenses of the other person involved in the collision.
When you purchase auto insurance, your insurer will automatically include state minimum coverage, as per law, but you also have the choice of increasing your coverage amounts above the required amount. Liability consists of three types of coverage - bodily injury per person, bodily injury per accident and property damage. Once you choose your amounts, your insurer will only payout those amounts to individuals who are hurt or experience loss from an accident you cause.
Once a claim is made, bodily injury coverage will usually pay for an injured person's medical bills, time off of work, emergency care and the expenses of a funeral if necessary. Policies usually have coverage caps for each person in a vehicle, but may cap an entire accident's coverage at the sum of maximum coverage available for two people. For example, if you have a bodily injury per person limit of $60,000, your total accident coverage may be capped at $120,000, meaning that if three passengers are injured in an accident, only $120,000 will be available between the three of them. Property damage coverage, on the other hand, will pay to replace or repair the same person's property losses, such as another vehicle, a house, a fence or some other stationary object.
If you are sued because of an accident you caused, you could be on the hook for the amount of a judgment that exceeds your liability coverage limits, which could result in a liquidation of some or all of your assets if you are otherwise unable to pay. Instead of leaving yourself financially vulnerable, purchase the enough liability coverage to reasonably pay for the medical expenses that could result in case of a serious accident.
Do I need to Personal Injury Protection (PIP) Coverage on my Auto Insurance Policy?
Not everyone must buy personal injury protection, but it's certainly a beneficial addition to your auto insurance policy, should the coverage be provided in your area. Personal injury protection, o...
Read More →
Finding out your Options when your Auto Insurance Denies your Claim
As if dealing with the hassle of an auto accident wasn’t enough, your insurance company has now denied your claim. Your car is wrecked, you’re out several hundred or more dollars, and y...
Read More →
Who is Covered by my Car Insurance if I am Not Driving?
If your friend borrows your car while hers is in the shop, or if your son lets a friend drive the family car, the coverage for the vehicle will be provided by your insurance, in most cases. While e...
Read More →