Liability car insurance protects you against financial losses if you’re found to be at fault in an accident. This type of coverage covers damages to the other party’s property and any injuries they may have sustained. It also provides protection for any legal fees that may arise from the accident.
In this article, we’ll go over the basics of liability car insurance, how it works, and why it is important for every driver to have.
What Is Liability Car Insurance?
Liability car insurance is a type of liability coverage that covers you against damages or injuries that you may cause to another person or their property while operating your vehicle. It doesn’t cover damages to your own vehicle or injuries to yourself. Liability on car insurance is required in most states and is a key component of any comprehensive car insurance policy.
It typically includes coverage for bodily injury liability and property damage liability. Bodily injury liability is responsible for compensating medical expenses and other losses incurred by the injured party, while property damage liability covers damages to the other party’s vehicle or property.
What does liability car insurance cover?
If you’re considering liability car insurance, then the first question in your mind will surely be: “What exactly is covered in this policy?”. Read on! We will delve into the details of this important type of car insurance coverage.
There are two main types of liability coverage that are typically included in an auto insurance policy:
- Bodily Injury Liability: This coverage helps protect drivers from financial responsibility if they cause an accident that results in injury to another person. It typically covers the injured party’s medical bills, lost wages, and other related expenses.
- Property Damage Liability: This coverage helps protect drivers from financial responsibility if they cause an accident that damages another person’s property. It typically covers repair or replacement costs for damaged vehicles, fences, buildings, or other property.
Overall, auto liability insurance is an important type of coverage that helps protect drivers from financial responsibility in the event of an accident. It is typically required by law in most states and is an essential part of any comprehensive auto insurance policy.
What does liability car insurance not cover?
While liability insurance can provide a sense of security, it is important to understand what it doesn’t cover.
Here are some common exclusions in liability car insurance policies:
Damages to your own vehicle: Liability insurance only covers damages or injuries to other parties involved in the accident. It doesn’t cover damages to your own vehicle or any property that you own. If you want additional protection for your vehicle or any injuries you may sustain in an accident, then you should consider purchasing collision and comprehensive coverage.
Personal injuries: Liability insurance doesn’t cover any personal injuries that you or your passengers may sustain in an accident. If you want coverage for medical expenses or lost wages, you will need to purchase additional personal injury protection (PIP) coverage.
Other drivers: Liability insurance only covers damages or injuries caused by you while operating your own vehicle. It doesn’t cover damages or injuries caused by other drivers on your policy, even if they’re driving your car.
Uninsured or underinsured drivers: Liability insurance doesn’t cover the costs of injuries or damages caused by an uninsured or underinsured driver. If you’re involved in an accident with one of these drivers, you’ll need to file an insurance claim or seek legal action to recover damages.
Criminal acts: Liability insurance doesn’t cover damages or injuries caused by criminal acts, such as theft or vandalism.
Intentional acts: Liability insurance doesn’t cover damages or injuries caused by intentional acts, such as a road rage incident.
Business use: Liability insurance doesn’t cover damages or injuries that occur while using your vehicle for business purposes. Those who use their cars for business will need to purchase commercial auto insurance.
It is important to carefully review your liability car insurance policy to understand what is and is not covered. If you have any questions about your coverage, it is always best to speak with your insurance agent or company.
What are the limits of liability for auto insurance?
While it provides valuable protection, liability insurance has coverage limits; this refers to the maximum amount an insurance company pays for a covered claim. These limits are typically specified in dollars and are set by the insurance company when the policy is purchased. It is important to understand these limits, as they can significantly impact the level of protection you have in the event of an accident.
- Bodily Injury Liability Limit Per Person
The bodily injury liability limit per person refers to the maximum amount of money that your insurance will pay for each individual injured in an accident.
For example, suppose your bodily injury liability limit per person is $50,000, and you’re involved in an accident that injures two people. In that case, your insurance will pay up to $50,000 for each person, for a total of $100,000. You may be liable for the difference if the damages exceed that limit.
- Bodily Injury Liability Limit Per Accident
The bodily injury liability limit per accident specifies the maximum amount that your insurance will pay for all injuries sustained in a single accident.
For example, suppose your bodily injury liability limit per accident is $100,000, and you are involved in an accident that injures three people. In that case, your insurance will pay up to $100,000 total for all injuries sustained in that accident. If the damages exceed this limit, you may be responsible for paying the difference out of pocket.
- Property Damage Liability Limit
The property damage liability limit refers to the maximum amount of coverage that your insurance will pay for damages to another person’s property in an accident.
For example, if your property damage liability limit is $25,000, and you are involved in an accident that damages another person’s car, your insurance will pay up to $25,000 for the damages. The difference in damages may be your responsibility if it exceeds this limit.
- Combined Single Limit
Some liability insurance policies have a combined single limit, which means that the coverage for both bodily injury and property damage is combined into one limit.
For example, a combined single limit of $100,000 means that the insurance will cover a maximum of $100,000 for both types of damages in an accident. If the damages incurred exceed that limit, the policyholder will be responsible for paying the difference.
The Bottom Line
In conclusion, liability car insurance is an essential type of coverage for any driver. It protects you from financial liability and can help cover damages to the other party’s vehicle or property. While it may not cover damages to your own vehicle, it is worth investing in a reputable policy to ensure that you are fully protected on the road. Don’t forget to consider additional coverage options, such as personal injury protection or collision coverage, to ensure that you’re fully protected in any driving scenario.