Liability insurance coverage is a type of car insurance that helps protect you from financial responsibility if you cause an accident that results in property damage or bodily injury to another person. It is required in most states as a minimum level of insurance coverage that drivers must have in order to operate a motor vehicle.
What does liability car insurance cover?
Liability car insurance typically covers the following:
Property damage: If you cause an accident that damages someone else’s property (e.g., another car, a fence, a building), your liability insurance will cover the cost of repairing or replacing the damaged property up to your policy’s limits.
Bodily injury: If you cause an accident that results in bodily injury to another person, your liability insurance will cover the cost of their medical bills and any other related expenses, such as lost wages.
What doesn’t liability car insurance cover?
Liability insurance does not cover damages to your own vehicle or injuries to yourself. If you want coverage for these types of losses, you will need to purchase additional coverage, such as Collision, Comprehensive, Medical payments and Personal injury protection insurance. Liability insurance also does not cover damages or injuries caused by an uninsured or underinsured driver.
Liability insurance coverage limits
Liability insurance policies have limits, which are the maximum amount of money that the insurance company will pay out for a covered loss. These limits are set by the insurance company and may vary depending on the type of policy and the state in which the policy is purchased. These limits are typically expressed as three numbers, such as 50/100/50. The first number refers to the maximum amount of coverage for injuries sustained by a single person in an accident. The second number refers to the maximum amount of coverage for injuries sustained by all people in an accident. The third number refers to the maximum amount of coverage for property damage caused by an accident.
For example: For a 50/100/50 policy, the insurance company will pay up to $50,000 per person for bodily injury, up to $100,000 per accident for bodily injury, and up to $25,000 per accident for property damage.
Do I need liability insurance?
Yes. Liability insurance is required in most states as a minimum level of coverage that drivers must have in order to operate a motor vehicle. Even if it is not required by law, it is a good idea to have liability insurance to protect yourself financially in the event that you cause an accident. If you do not have liability insurance and you are at fault for an accident, you may be held personally responsible for paying for any damages or injuries that result from the accident. This can be a financial burden that is difficult to bear, especially if the damages or injuries are extensive.