Several people who get their car insured do not really know what liability car insurance cover. Well, in this article, I will be telling you what does liability car insurance cover and what it doesn’t cover.
What is Liability Car Insurance?
Liability car insurance pays to fix the damage you cause to other people and their property with your car. Liability just means “responsibility,” so it makes sense that if you caused an accident, your liability insurance would pay out.
Liability auto insurance includes both bodily injury liability coverage and property damage liability coverage, and most states require you to have both. Here are the differences between the two and how much liability car insurance you need.
What does liability car insurance cover?
Your motor policy’s liability insurance is the section that covers costs if you cause an accident. There are basically two key parts to it:
Bodily injury liability coverage
If you cause a car accident and cause injuries to other persons, this coverage will pay out. The bodily injury liability coverage, or BI, often pays for things like medical costs, rehabilitation services, and lost income if an individual is unable to work while healing. In case of a fatal accident, it might also pay for burial expenses.
Liability insurance for property damage
When you cause an accident and are at fault, this coverage, commonly referred to as PD, covers any damage you cause to vehicles or other property. For instance, it could be beneficial to fix the fence you ran into or repair the other driver’s automobile.
Property damage liability coverage may also cover the things in a person’s car. Let’s say you get in a small accident and the other driver’s trunk is full of shiny stuff worth $4,000. Your liability insurance for damage to other people’s property will pay for both the new bumper and the new windshield.
Liability auto insurance can pay for court costs or attorney fees in addition to covering injuries and property damage in the event that you are sued after an accident.
Liability Car insurance limits
Only the maximum sums, or limits, mentioned in your policy will be covered by your liability auto coverage. If accident-related damage is greater than those caps, you’ll be responsible for the remaining costs.
Split limit liability
The three primary liability limits found in most auto policies are frequently represented by three digits. For illustration, the minimal coverage required by your state would be something like “30/60/15.” How to read that is as follows.
Bodily injury liability limit per person
The first number shows how much your insurance will pay to help one person get better after an accident. (In the previous example, “30” stands for $30,000.)
Liability cap for bodily injuries per accident
The second number is the total number of injuries, besides your own, that you caused in the accident. If an accident hurts more than one person, the per-accident cap is used. (This is the number 60, which means $60,000.)
Liability cap for property damage per incident.
The last number is the most your insurance company will pay you if you damage someone else’s property. This includes damage to cars, buildings, and anything else that isn’t a person. The number “15” is equal to $15,000.
What the liability portion of car insurance does not cover
Auto liability insurance is solely intended to compensate third parties for losses you incur while operating a vehicle; it will not cover your own medical expenses or auto repairs.
You’ll need to rely on other types of insurance to pay for your own expenses, such as health insurance to pay for any necessary medical care and collision insurance to pay for vehicle repairs. Take into account purchasing full coverage auto insurance if you want extra security.
Full coverage is a general term for a range of coverage options, including liability insurance, comprehensive coverage, and collision coverage.
Is liability car insurance necessary?
In a nutshell, yes: Liability coverage is a requirement for nearly all auto insurance policy.
Every state, with the exception of Virginia, New Hampshire, and Alaska, mandates that all drivers carry liability auto insurance. (Alaska exempts some citizens from its necessary minimums, while Virginia waives the responsibility requirement if you pay the state $500 annually.)
Each state determines its own minimum standards for auto insurance, and many also impose additional insurance requirements. (See following table)
These regulations are in place to safeguard motorists who are not at fault in an accident. If another driver causes an accident and you are at fault, you ought to be able to resume normal operations right away. Having liability auto insurance enables this.
What is the price of liability insurance?
According to recent NerdWallet rate research, the average nationwide cost of minimum auto insurance, which often includes liability auto insurance and other state-mandated coverage, is $561 per year.
If you have an accident for which you were at fault, your average annual premium will increase to $862. Minimum insurance for drivers with a recent DUI or DWI costs, on average, $1,134.
Your age, your personal driving history, the brand and model of your automobile, and, in some jurisdictions, your credit score all play a role in determining your state’s average car insurance premiums. We advise comparing auto insurance quotes to discover the best policy for you.
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