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Liability insurance coverage
takes effect when you are legally responsible for an accident. It
pays for expenses to the other party in the accident. This covers
bodily injury and property damage to the other person, including:
payment for the other party’s medical bills, damaged property, car repairs, legal expenses and fees, emotional distress, and
pain and suffering.
Almost all states require a minimum limit of liability insurance
for registered drivers. The auto insurance company will only pay
out up to a certain limit for each accident. If the judgement against
you is higher, you will be required to pay out-of-pocket the difference
not paid by your insurer. The Insurance Information Institute recommends
that you buy at least $100,000 of bodily injury protection per person
and $300,000 per accident to protect yourself financially. You may
also consider an umbrella policy which covers you when the underlying
policy is exhausted.
Liability amounts are usually written as three numbers separated
by slashes.
First number: bodily injury liability maximum for
one person’s injuries
Second number: bodily injury liability maximum
for all injuries in one accident
Third number: property damage liability maximum
for one accident
Type of liability insurance coverage includes:
Bodily Injury Liability
Coverage
Property Damage Liability
Coverage
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