Car Insurance: What Liability Insurance Covers
Liability insurance is a vital part of car insurance. Unlike collision insurance that is optional; liability insurance is made compulsory for all drivers in most states or countries across the world. So, if you are planning to buy a car, you just need to have it at the back of your mind that law requires that you buy auto liability insurance. So you need to make this as part of your budget. You can shop around so that you can know the amount of premium that you may likely pay for this type of coverage.
What Liability Insurance Covers
Auto liability insurance provides two main coverages namely bodily injury liability coverage and property damage liability coverage. I will explain these further below.
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Bodily Injury Liability
If you are a driver and you get involved in an accident and it happens that you are the one at fault, the liability you might incur may go far beyond what you will ever think. With bodily injury coverage, the insurance company will pay for the costs of medical expenses of the other party. In some cases, there may be need to provide emergency aids to the victim at the spot where the accident occurred before the person is taken to the hospital, liability insurance covers this too. Also, if the injured person requires to be hospitalized for a long period, bodily injury coverage will help you pay for the post-accident medical costs that might come as a result of the accident. If the accident leads to a loss of income, the victim will receive compensation from the insurance company. If peradventure the accident victim dies, your liability insurance covers the funeral expenses. In case the family of the accident victim institutes legal action against you, bodily injury coverage will help you pay legal fees. Please note that car liability insurance will not pay for your own medical expenses in case you sustain injury in the accident, you will be responsible for your own medical bills except you have another insurance that provides you medical coverage which can help you pay the medical bills.
Property Damage Liability
Property damage coverage helps you repair the property of another person that you damage if you are involved in an accident and you are the one at fault. Property damage covers such costs as cost of repairs or replacement cost of the property you damage in the course of an accident. The property may be another person’s car or house. Please note that car liability insurance will not repair your own car. If you want your car repaired, you will need to pay from your own pocket except you have collision coverage.
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What is the car liability insurance limit?
It is actually good that you have car liability insurance but you should understand that there is limit to how much the insurance will pay you for bodily injury and property damage if you are involved in an accident in which you are at fault. I mentioned that car liability insurance is not optional; it is compulsory for all drivers. However, each State sets its minimum requirements which every driver must carry on their cars. The limits are usually in three categories. For bodily injury coverage, there is minimum coverage that a driver must have per person who might sustain injury in an accident in which the driver is at fault. This is usually called Bodily Injury Liability per Person. In the same way, there is minimum coverage per accident. This is called Bodily Injury Liability per Accident. The third one is Property Damage Liability per Accident. For instance, if you see something like 50/100/50 as applied to drivers in Alaska, it can be interpreted as; $50,000 for Bodily Injury Liability Per Person, $100,000 for Bodily Injury Liability Per Accident and $50,000 for Property Damage Liability Per Accident. This also represents the maximum amount you can claim per person or accident as the case may be. As earlier explained, this is just the required minimum coverage for drivers in Alaska. This may be different for another driver living in different State. For example, the minimum car liability insurance for drivers in Arizona is 25/50/25 representing $25,000 for Bodily Injury Liability Per Person, $50,000 for Bodily Injury Liability Per Accident and $25,000 for Property Damage Liability Per Accident.
What this means is that the insurance company will not pay you above these limits if you are involved in any of the covered events. If you know that these amounts may not be sufficient for you, you are free to apply for extra coverages
Read Also: Minimum Car Insurance Coverage Requirements by State
How to Get Cheap Auto Liability Insurance
For people looking for cheap auto liability insurance, there is little you may be able to do about this. The reason is that, deductibles are not allowed under auto liability insurance. One of the proven ways of reducing insurance cost is to increase your deductibles. Unfortunately, this is not allowed under car liability insurance. The only way to lower your premium may be for you to only buy the required minimum car insurance coverage. However, there is no guaranty that the required minimum car insurance coverage will provide sufficient coverage that you may need. Nevertheless, if you shop around, you may be able to compare rates from different insurance companies so that you can choose the one that is okay with you.