Well, today I’ve decided to compile this article on liability insurance. The article set out to answer the question with regard to liability insurance.
Auto, car or vehicle liability insurance is a type of car insurance coverage that’s required by law in most states. If you cause an accident, liability coverage helps pay for the other person’s expenses.
There are two types of auto liability coverage that drivers in each state must have: bodily injury liability coverage and property damage liability coverage.
The insurance policy has two components always included together: Bodily Injury coverage and Property Damage coverage.
Vehicle liability insurance is the basic insurance coverage that covers injuries or damage to other people or property if you’re at fault for an accident.
If you cause an accident that injures or even kills another person, the Bodily Injury (BI) portion of your Liability insurance will pay for the related expenses. Bodily Injury (BI) will cover hospital and medical bills, rehabilitation, long-term nursing care, funeral expenses, lost earnings, pain and suffering, and other expenses, up to the limits you select.
If you cause an accident that damages another person’s property, the Property Damage (PD) portion of your Liability insurance will pay for the related expenses. Property Damage (PD) will cover the expense to repair or replace damaged items, including other vehicles, lamp posts, houses or even a pet, up to the limits you select.
Liability insurance also will pay for your legal defense costs if you are sued as a result of your involvement with the accident.
Who needs liability insurance?
Like every other insurance policy, anyone who drives a vehicle needs Liability insurance. In most situations, Liability insurance is required by law.
For-hire truckers operating under their own authority must have Liability insurance in order to obtain a filing.
Liability Insurance Coverage Limits And Other Details
Liability insurance requires you to select limits. These limits determine the maximum amount your insurance company will pay if you need to use the insurance coverage. Limits are described either as split limits or as a combined single limit.
Read: Car Insurance For First Time Drivers – Guide
In other words, the amount your insurer will pay for a covered liability insurance claim is subject to the coverage limits you choose. Each state sets minimum coverage limits for bodily injury liability and property damage liability that drivers must purchase, but you may decide to buy additional coverage. You may see three liability coverage limits on your car insurance policy:
Property damage liability limit. This is the maximum amount your insurer would pay to repair the damage you cause to another party’s property. The maximum payout would not exceed the limit you’ve set.
Bodily injury liability limit per person. This establishes a maximum payout for each individual who is injured in an accident that you cause.
Bodily injury liability limit per accident. This sets a cap on the total amount that your insurance provider will pay out for all medical expenses other people incur from a single accident you cause. It’s important to set this limit at an amount that makes you comfortable, as it may be needed to help pay for the medical expenses incurred by multiple people.
Liability insurance example:
You can’t stop your van in time, and rear-end the car in front of you. The other car’s bumper is damaged, and the other driver has a sprained wrist.
You have a combined single limit of $300,000 for your Liability insurance.
The Bodily Injury component of your Liability insurance would pay the other driver’s $1,500 medical bill wrist X-rays.
The Property Damage component of your Liability insurance would pay the $1,000 bill to replace the other car’s bumper.
Read: What is comprehensive insurance?
Since you chose a combined single limit (CSL) of $300,000, your total Liability expenses of $2,500 are completely covered by your insurance.
Note that any costs that exceed your liability coverage limits are your responsibility — in other words, you’d have to pay them out of your own pocket. That’s why it may be a good idea to increase your auto liability limits above the state’s minimum requirements by purchasing more coverage.
Liability insurance exceptions and restrictions
Your Property Damage insurance limits cannot exceed your Bodily Injury insurance per person limits if you choose a split limit.
Multiple vehicles
If one vehicle on the policy has Liability insurance, all of the vehicles must have it. The selected Liability limits must be the same for all vehicles on a policy.
State minimums
Each state sets laws regarding how much Liability insurance its residents are required to have. This is known as your state’s minimum limits or minimum limit requirements.
Fortunately, Progressive knows the requirements for each state and will make sure you have at least the minimum amount of Liability insurance required to meet your state’s laws.
Filings
Liability insurance is required when a filing is on a commercial auto insurance policy.
Radius restrictions
Minimum Liability limits of $25,000/$50,000 or a $50,000 combined single limit are required if the radius of operation is 300 miles or more.
Trailers
Extra trailers are charged a flat fee for Liability insurance.
In conclusion, Liability coverage typically doesn’t pay for damage to your own car after an accident — collision coverage helps with that.
Liability coverage also does not extend to costs associated with your own injuries after an accident you cause. If you want this type of coverage, you may want to consider medical payments coverage.
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