Liability Insurance

What is Liability Insurance

Liability insurance or sometimes called as casualty insurance is a legal requirement in most US states; thus, it’s one of the most critical types of auto insurance. Upon the registration of a new vehicle, a driver is mandated to carry the minimum liability coverage, set per state level. The liability coverage may help pay for injuries and property damages to others in the event of an accident which you were legally responsible for.

Benefits of Liability Insurance

  1. If the accident was your fault and it resulted in another person’s injury and even death, the Bodily Injury (BI) part of your coverage helps pay for hospital and medical bills, emergency aid, nursing care, funeral expenses, and other injury-related expenses.
  2. If the injured party is needed to undergo a period of rehabilitation such as physical therapy and may not be able to do their job. Usually, the liability coverage will compensate for the loss of income.
  3. In the same way, the Property Damage (PD) part of your liability coverage will pay for the accident-related expenses such as repair or replacement of damaged parts and includes other vehicles that were involved. Property damage may also cover for other non-vehicle properties such as houses, fences, porch, mailboxes, lamp posts, and many others.
  4. In most cases, if you are sued as a result of the accident, the liability insurance will also pay for your legal defense expenses.

Liability Insurance Coverage Limits

Take note that only minimum limits of the liability insurance are set in most US states and the amount of coverage varies between states. This means that if you choose the lowest limits, the coverage may not be enough as car accidents can be expensive, and it may not protect you against other related costs and damage claims. You have to pay for the balance of the skyrocketing claims from your pocket. It’s wise to buy additional coverage and select the limits of your liability insurance and determine the maximum amount your insurance provider will pay.

The liability coverage limits on your car insurance policy can be applied to:

  • Bodily injury liability limit per person
    This is the maximum amount your insurance provider will pray for each person injured in an accident which you are liable for.
  • Physical injury liability limit per accident
    This is the maximum amount your insurance provider will pay for all injury-related expenses of multiple people who are involved in the single accident you have caused.
  • Property damage liability limit

This sets the maximum payout the insurance company will pay to repair or replace another party’s property.
You can select your coverage limits from the packages your insurance company offers. For example, when considering for coverage limits, you may see something like 50/100/30 or $50,000 BI per person limit, $100,000 BI per accident limit, $30,000 PD limit.

Liability insurance does not cover your medical expenses and property damages after an accident. Other types of auto insurance such as collision coverage and medical payment coverage can help pay for those expenses.
Talk to a local agent who can help you select the limits that you are comfortable with. Get a free quote today.