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What is Liability Insurance?

Whether you are headed to work on a Monday morning or on your way to the beach for a relaxing weekend vacation, a car accident can really put a damper on your plans. Accidents can cause injuries and damage to property, which could result in a major dent in your wallet, especially if the accident is your fault.

If you have been fortunate enough to avoid an accident you may not be aware of all of the coverage limits on your auto insurance policy, but you should be prepared before an accident occurs. Do you know what part of your insurance plan would protect you if you caused an accident? Liability insurance is a term that you need to understand when it comes to selecting the right coverage.

What is Auto Liability Insurance?

If you cause an accident, auto liability insurance is the coverage that will help pay for the damages inflicted on the other party involved. The two types of auto liability coverage are bodily injury liability coverage and property damage liability coverage.

What Does Liability Insurance Cover?

If a person is hurt in an accident you caused, bodily injury liability coverage will help pay for the medical expenses for that person including any emergency aid required at the scene. This coverage will also help to cover any loss of income they may experience as a result of the accident and it will also help pay for legal fees if you are subsequently sued by the other party.

Whether you crashed into a fence, a house or a car, property damage liability will help to cover costs to repair or replace any property or objects damaged in the accident. This coverage can also be used to help protect your assets if the other party files a lawsuit.

Where Do I Find Liability Coverage Limits On My Auto Policy?

Liability auto insurance coverage is divided into three amounts: a bodily injury limit per person, per incident; a total bodily injury limit per incident and a total property damage limit per incident. Liability coverage limits are often listed as 15/25/10, 100/300/100 or 250/500/100, among others. But what do these numbers mean?

In the case of 15/25/10, it means that in the event of an accident your policy will pay out the following amounts:

  • $15,000 for bodily injury, per person
  • $25,000 for total bodily injury
  • $10,000 for property damage

These limits mean that this is the most the insurance company will pay in the event of a claim. For example, if you caused an accident that injured two people and each of their medical bills were $15,000 ($30,000 in total) then your insurance would not cover the entire cost as your total bodily injury limit is $25,000.

Does Liability Car Insurance Cover Damage to My Vehicle?

No. In order to have your auto insurance cover damage to your vehicle you will need to have additional coverage such as collision and comprehensive coverage. If you are interested in a policy that covers your medical expenses you should also consider medical payments coverage or personal injury protection.

How Much Liability Auto Insurance Coverage Do I Need?

Some form of auto liability coverage is required in every state and the minimum limits for each state vary. While the most affordable insurance plan will offer the minimum liability coverage it may be wise to get quotes for higher limits to ensure you are adequately protected.

What Happens if I Cause an Accident That Exceeds My Liability Insurance Limits?

If you are found at fault for causing an accident, you will be responsible to pay for all of the expenses of the injured party, regardless of your insurance limits. You can be sued for these damages and will be forced to pay whether you have assets or not. A complete understanding of your insurance policy and your liability coverage limits are critical so you don’t end up in debt from an accident.

Whether you have an auto insurance policy with another company or you’re purchasing your first one, USAgencies can help you find low-cost car insurance that fits your needs and budget. We compare rates from top insurance companies to find you the best coverage at the best price so you can be certain you’re getting a great deal. Request a free auto insurance quote online by entering your zip code in the form at the top of the page or by calling us at 800-958-8545.