Liability car insurance coverage is a vital item while getting an insurance policy for your car. It helps cover the other driver’s car damages or medical bills and expenses for any injuries sustained by the other driver if you are the at-fault driver after an accident has occurred. Liability car insurance coverage covers the costs of damages and any injuries up to the covered limit and is available in two forms:
- Bodily injury liability. The expenses are taken care of by the insurance cover that the other party’s injuries instigated by your car.
- Property damage liability. The insurance coverage compensates for costs of repairs done to the other party’s damaged possessions, which could either be a house or car.
Key things to know about liability insurance
Liability car insurance coverage does not cover any expenses that you incur after an accident has happened.
Liability car insurance coverage only covers the bodily injuries and property destruction that you cause to others.
Some states oblige that every driver must possess some liability car insurance coverage.
If you are to buy liability insurance, consider the assets you own and the driving records that have been recorded. If you possess more financial assets, consider buying additional liability car insurance coverage to protect yourself if a claim is filed in court against you.
What Does Liability Insurance Cover
First, different car insurance policies offer various types of coverage, which covers diverse forms of protection. Liability car insurance coverage, in particular, comes in two forms; liability car insurance coverage for bodily injuries and liability car insurance coverage for destruction of property. Besides, is the uninsured/ underinsured motorist liability coverage.
Bodily injury liability insurance
When it comes to bodily liability insurance, you or your car are not directly covered. Still, there is a cover for the other driver in case of any sustained injuries and medical bills, lost incomes or wages, pain and distress caused, and sometimes legal charges in case of an accident and you are the at-fault driver. Furthermore, if a claim is filed against you by the other party, bodily injury liability insurance coverage protects you. However, what is covered differs from one state to another, from one insurance policy to another.
If you are a prospective buyer of the insurance cover, you should buy the utmost bodily injury liability car insurance coverage limit affordable to you. Suppose your insurance policy coverage is not enough to ensure all injuries and other related costs you caused after an accident, and you are the driver at fault. In that case, you are at risk of lawsuits, and your financial assets are at risk.
Property damage liability insurance
Property damage liability car insurance coverage covers the cost of any damages caused to the other drivers’ assets. Liability car insurance coverage does not protect your vehicle or property. If you need to get covered for your car or property, an additional collision or comprehensive coverage is required.
Usually, property damage liability car insurance coverage only takes care of repairs or replacements for any damages you caused on the other party’s vehicle, buildings, house, telephone poles, or lamppost. The particular types of property are covered differently following the insurance policy and coverage amount limit. If you are not sure of the amounts, make sure you understand the contract cautiously or seek assistance from your insurance coverage agent.
Uninsured/ underinsured motorist coverage
Uninsured motorist coverage covers you directly, dissimilar to the regular liability coverage. Uninsured motorist coverage protects you for damages caused to your car or any injuries that you sustain.
For instance, if someone smashes into you or is hurt in an accident by a smash and run, and there are no accountable persons to file the case against, you will be covered for the medical bills you incur. In other terms, this form of liability car insurance coverage takes care of the expenses that the other driver should have paid but did not.
On the other hand, underinsured motorist coverage also covers you directly. The component relates when the other party possesses insurance coverage but is inadequate to cater to the costs that accrue to the damages sustained. Underinsured motorist coverage pays you extra money to the limits you had chosen for your insurance policy.
Like the standard liability car insurance coverage, both uninsured and underinsured motorist coverage comes in two forms; property damage and bodily injury, mainly termed as underinsured/ uninsured motorist bodily injury coverage, and the underinsured/ uninsured motorist property damage coverage.
Most states require that drivers get at least uninsured motorist insurance coverage if not uninsured and underinsured motorist coverage. Everyone should get this insurance coverage for their car since it is a cheap liability car insurance to avoid instances of having to dig into their pocket for expenses if you are involved in a car accident with an uninsured or underinsured driver. People in most states drive around without insurance cover, ignoring the available cheap liability car insurance coverage that they can afford and posing a danger to others if they are involved in an accident, and they are the at-fault driver.
What Does Liability Insurance Not Cover
There are somethings that liability car insurance coverage does not take care of that are worth noting. Suppose you are the driver at fault in the event of a car crash. In that case, liability auto insurance coverage does not cover the costs of damages caused to your property or any medical expenses for injuries sustained. It only covers any costs of property damage and bodily injuries that you drive to the other parties. Although it is essential, liability car insurance coverage is not the only type of insurance coverage you should consider.
There is additional insurance coverage that you should contemplate, such as collision insurance coverage and personal injury protection insurance coverage—this aids in protecting you and the property you own in case of an accident. If you possess more financial assets, consider getting higher or more liability car insurance coverage so that you do not put your property in jeopardy in case a lawsuit is filed against you. The other driver’s damaged property or vehicle costs will be taken care of by your insurance provider, less your deductible, and to your maximum covered limit.
How Much Liability Car Insurance Do You Need.
Liability auto insurance coverage is designed to cover your financial assets in case of an accident happening, and you are the at-fault driver. It is regarded in some ways as an odd piece of ‘car’ insurance since you are not trying to insure your car, but you want the insurance policy to protect you and your financial assets if you get involved in a car crash while you are the driver at-fault.
Even if your state does not require drivers to obtain liability car insurance coverage, you should get at least $400000 worth of liability car insurance coverage, including property damage liability and bodily injury liability. Liability auto insurance coverage will help you pay for other costs such as medical bills when you cause an accident. It also protects your financial assets if you get sued.
The amount of liability car insurance coverage that you require depends on your net worth. Begin with the worst-case scenario and calculate backward—the value of all the money you have and the things you own, minus your debt.
For instance, if you crash into another car and you are the at-fault driver, three people are injured in the process, you will be liable for the value of the vehicle and any medical bills of the three people. Can your liability car insurance coverage pay for the damages caused? If you do not have enough coverage and your limits cannot cover the bills, you will be personally liable for the excess money required.
The people who sustained injuries can file claims against you for money if you refuse to pay. You can lose your home or have your wages garnished in some states.
The minimum for liability auto insurance coverage may not cover all your assets’ value. Recall the liability insurance protects your financial safety, so having more insurance coverage can keep your wages, home, and savings safe if the worst happened.
If you do not have many things to get worried about, you may not need any additional coverage.
When Is The Liability Insurance Needed
If you are entangled in a car accident, and you are the driver at fault, liability car insurance coverage does not cover any damages caused to your possessions or any of your medical bills. Although it is essential, liability auto insurance coverage isn’t the single type of insurance that one ought to consider. Suppose you need protection in case of an accident. In that case, you will be required to have collision coverage and personal injury protection insurance for your car damage and your bodily injuries in that order.
If you do not possess liability car insurance coverage, you risk having to pay for claims filed against you by the other party from your pocket money. Liability car insurance coverage makes a distinction between the people you hurt and the things that you might break in the event of an accident. People are covered under bodily injury liability, while other things are categorized under property damage. These differences can be outlined when buying the liability car insurance coverage and the maximum aggregate of money your insurance company should pay out for the claim.
It is recommended that you get more coverage than your net worth, especially if you have a high income and relatively few financial assets. Your earnings in the future may be targeted as a means of compensating another party for their incurred costs, especially if you are the at-fault driver.
How Much Is Liability Coverage Car Insurance Cost.
Liability car insurance coverage does not have the right or wrong amount, provided you get at least the minimum amount that your state requires you. The best policy for you depends on numerous factors. However, you should buy as much liability auto insurance coverage that you can manage to pay. You will not have much to be worried about while on the road or not.
Also, note that higher coverage levels are marginally expensive and can save you a great deal if in an accident and you are the driver at fault.
If we have insurance cover for a driver, the insurance coverage raises by not more than $10 monthly if he raises the insurance coverage from 20/40/10 to 100k/200k/500k.
|Liability insurance coverage limits||Average monthly cost|
The breakdown is usually for each person’s bodily injury, coverage for bodily injury per car accident, and property damage per accident cover.
Comprehensive insurance coverage is usually relatively inexpensive. You will require to have it whether you are driving a brand new car or an old car.
It protects you from damages caused by either theft, fire, storm, a natural disaster occurrence, or a tree branch dropping on your car. Comprehensive coverage caters for the costs of repairs or replacements of your vehicle, provided the damages associated are not due to a collision.
On the other hand, collision coverage pays for the damages made on your car, regardless of the person at fault if you have an accident with another vehicle, object, or yourself.
Personal injury protection (PIP)
PIP has more comprehensive coverage, higher premium, and higher coverage limits compared to medical payments coverage. PIP generally has a deductible. It covers medical expenses, funeral costs, if any, and occupational or physical therapy.
What Is No-Fault Liability Car Insurance
Most of the No-fault states require not to establish the one on the wrong driver in the event an accident happens to collect reimbursement for harm claims. No-fault liability car insurance coverage requires that every party involved filing an entitlement with their insurer, limiting court cases. Still, it inexplicably conveys queries of equality to the issue because reckless motorists often are considered to walk off without punishment. Although the no-fault countries do not eradicate the probabilities of reckless drivers getting sued, it limits the situations under which the reckless drivers could be charged.
Residual bodily injury liability coverage
This liability car insurance coverage prolongs the monetary securities given by no-fault insurance if the mishap ends up in a court case. Companies or individuals using a no-fault base policy could presume their insurer to cover the filed entitlements regarding damages, injuries, or car crash-associated court case bills under personal injury protection (PIP). Nevertheless, the coverage contains confines that will not cover claims or accidents which go way higher and beyond the verge stated. Outstanding Liability car insurance coverage deals with higher protection if numerous persons are involved in an accident and sustain injuries or death.
Does Liability Car Insurance Cover Rental Cars
Numerous car insurance policies encompass lease vehicles. However, there is an option of discussing with your insurance service provider to establish if the liability auto insurance coverage is sufficient or whether you should include it in your present insurance policy if you will be hiring vehicles regularly or for a prolonged period of time. If at all you are not familiar with the vehicle you are renting, or a person in your insurance policy is hiring a vehicle, you would feel a bit at ease adding liability car insurance coverage limit. Having been unaware of a vehicle might make you or your family member be more in danger of getting into accidents.
If you get into an accident with a rental car, rental car insurance will protect you from the financial risks involved. Rental car insurance can be obtained directly from the insurance agent, as an extra benefit with your credit card, or through a third-party insurer. However, it is essential to check if you are covered since most credit cards offer limited liability auto insurance coverage for rental cars.
Companies dealing with rental cars are given obligation by the law to have a state’s lowest quantity of liability car insurance coverage on their vehicles so that they can offer their cheap liability car insurance coverage for a small fee daily to cover damage caused to someone else car or passengers in case of an accident. It is sold as supplemental liability car insurance coverage, and it is run for around $13 to $18 daily. In case you’re renting a car and do not possess car insurance, you should add supplemental liability insurance.
Liability Insurance If You Do Not Own A Car
Suppose you require liability auto insurance coverage for a vehicle, but you do not own a car. In that case, there exists a few cheap liability car insurance coverage options for you in addition to the supplemental liability coverage provided by companies dealing with rental cars.
Non-owner car insurance.
The coverage is helpful while driving another person’s car often but do not own one. It covers liabilities- bodily injuries and property damage and the coverage is relatively restricted past that. The personal injury protection cover deals with the medical bills that you incur due to the accident caused. Uninsured and underinsured, on the other hand, are not always offered car insurance policies of non-owners.
Car owners’ liability auto insurance coverage generally protects you while driving the owner’s car, even in events they are not with you. However, it is to a specific limit. If you get involved in an accident, and the expenses go beyond what the policy ought to payout, you may have to dig into your pocket for the extra amount of money.
In other terms, non-owner car insurance works as an addition to the prevailing insurance policy of car owners. It will cater for the excess amount of money if the accident expenses are in excess.
You can also obtain non-owner liability car insurance coverage while you rent a car for about one month to one year. The non-owner car insurance is a cheap liability car insurance than the supplemental liability car insurance coverage provided by rental car companies and insurance Agents. Supplemental liability car insurance also provides lower protection than non-owner car insurance.
The non-owner liability auto insurance coverage is essential when you rent cars intermittently, for instance, borrowing a car several times in one year to use for one day or three. All the distress you would go through by taking the entire insurance policy and making payments of premiums is not worth taking.
If you live with a friend or family member and you frequently borrow their car, ask them to add you to the liability car insurance coverage policy they use. The process is more straightforward and fast to work with. Most insurance companies necessitate that all drivers in a family must be on an insurance policy.
Since there is no car insured under a non-owner insurance policy, it doesn’t include the other coverages that usually are part of the full range, which includes:
Collision coverage: covers damages to your car after a mishap and not considering the driver who was on the wrong.
Comprehensive coverage: covers any damages caused to your car when it is not being driven, including damages caused by falling objects, extreme weather, fire, flood, theft, or wreckage.
Roadside assistance: covers any emergencies that could leave you stranded, such as jump-starts, flat-tire changing, and towing.
The non-owner insurance is liability-only car insurance coverage. Presume you have been tangled in a car crash, plus you are the driver on the wrong. In that case, the liability-only car insurance policy will cover any damages to the other drivers’ car instead of the vehicle you are driving.
Liability Car Insurance Coverage FAQs
What liability coverage should I get?
Most states do not require liability insurance. However, suppose your state does not need you to have liability car insurance coverage. In that case, you need to obtain at least $4000,000 worth of insurance coverage, including liability car insurance coverage, bodily injury liability, and property damage liability. The kind of car you drive does not matter. Liability auto insurance coverage is an absolute must-have for every driver. By obtaining liability car insurance coverage, you get the assurance of coverage for any costs related to fixing the other driver’s car or property damage. Expenses accrued, such as the medical bills resulting from bodily injuries or lost wages caused due to an accident, and you were the driver at fault, are also covered.
Without the liability auto insurance coverage, you would be held liable for paying the other driver’s bodily injuries and property damage costs with your own pocket money. That could jeopardize your financial assets and even cause your future wages garnished until all the damages have been paid.
Does liability insurance cover my car if someone hits me?
Liability car insurance coverage doesn’t protect the car you own if someone else causes an accident. To be on the safer side, you can purchase uninsured/underinsured motorist insurance if your vehicle is crashed or hit by a different driver who possesses inadequate liability car insurance coverage. The uninsured motorist coverage caters for all the health expenses for you and the person along for the ride caused by a hit-and-run driver who is not insured. However, it does not cover your car damages.
On the other hand, if you are hit by a hit-and-run driver, in possession of an insurance cover, which is not adequate, the underinsured motorist insurance covers you if you are hit by a driver who has insurance coverage below the required minimums by the state.
What is the best liability coverage for car insurance?
If you are involved in an accident that caused someone to be hurt, and you are the at-fault driver, claims can be filed against you, and you end up being sued for a lot of money. The liability car insurance coverage does not protect you or your vehicle, but it protects your financial assets. Suppose you are the at-fault driver in an accident. In that case, your liability insurance covers the other party’s costs, and you would responsible for their medical bills or repairs, and replacements cost sustained due to the accident.
The amount of liability car insurance coverage you should possess should be high enough to cover your assets in an accident. It is suggested that you get at least a $100,000/ $400000 limit, but it may not be enough.
What happens if you have liability insurance and your car is totaled
Having obtained liability car insurance coverage and your car is totaled, you will be forced to pay for the replacement of your car yourself, or you can register a court case via the other party’s insurance company. Liability auto car insurance only doesn’t cover your vehicle, but only the injuries and damages you cause to others.
Suppose you are the at-fault driver in the event of an accident, and the expenses of your car are more than making repairs compared to what its value is or cannot be repaired. In that case, your insurance provider will compensate you the value of the vehicle (deductible subtracted) if you possess the required liability car insurance coverage. If you were found not at fault, you could choose between filing a lawsuit with the car insurance provider of the other driver. The insurer recompenses you what the value of your totaled car is, with the driver at fault property damage liability coverage. Suppose your vehicle is damaged in any way, or you were hit by a driver who does not have insurance. In that case, several coverages can cover you against a totaled car on your insurance coverage policy.
How does car insurance work if I’m not at fault?
In the event of an accident, and you are not the driver on the wrong, you can file an entitlement with your car insurance provider for damages and injuries sustained if you have the right liability car insurance coverage. The insurance coverage will pay for the cost of repairs or the total loss of your car. You will have to pay for your collision deductible towards the repairs or replacement if you take this approach. If your insurer can settle the case with the other at-fault driver, you may get your money back.
Also, if you missed work because of injuries you sustained in a car accident that was not your fault, the other driver’s liability auto insurance coverage to pay for your lost wages. However, the insurance policy has a limit on the amount you can recover for the lost wages.
Suppose you are hit by a driver who has liability limits that are not high enough to take care of all your medical bills and lost wages. In that case, you can claim for your car’s damage under your own uninsured motorist coverage property damage. Usually, there is no deductible for uninsured motorist coverage property damage claims. If you live in a no-fault state, your injury protection coverage will cover your lost wages and medical expenses up to the stated limits of your policy.
When the other driver crashes your car such that it cannot be repaired, his liability auto insurance coverage should pay you for your car’s actual value before it was totaled. The insurer should also be responsible for the sales tax payments on the new vehicle that you purchase with the insurance money.
On the other hand, if you are afraid of your liability, car insurance coverage rates will be higher at renewal after an accident has happened, and you are the driver at fault; they are not. Car insurance service providers are in most states prohibited from raising their premium rates in events of accidents that were not-at-fault drivers. However, those laws do not preclude your insurance provider from discarding your insurance policy during the renewal time if you had previously made recent claims of any type.