Understanding Liability Auto Insurance

Car accidents can happen to anyone, at any time. While you may do everything in your power to drive safely and avoid collisions, you cannot always control other drivers on the road. That’s why every driver needs liability auto insurance, to protect themselves financially in case they cause an accident. This article is designed to help you understand the ins and outs of liability auto insurance, so you can make informed decisions about your coverage.

What is Liability Auto Insurance?

Liability auto insurance is a type of car insurance that covers the cost of damages or injuries you cause in an accident. If you are found to be at fault for the accident, your liability coverage will pay for the other driver’s medical bills, damage to their vehicle, and any other costs associated with the accident. It does not cover any damages or injuries sustained by you, your passengers, or your vehicle.

In most states, liability auto insurance is required by law. The minimum amount of coverage you are required to carry varies by state, but it typically includes:

These numbers refer to the maximum amount of coverage you have for bodily injury per person, bodily injury per accident, and property damage per accident. For example, in Alabama, you are required to have at least $25,000 in coverage for bodily injury per person, $50,000 in coverage for bodily injury per accident, and $25,000 in coverage for property damage per accident.

Why is Liability Auto Insurance Required?

Liability auto insurance is required by law because it helps ensure that drivers are able to cover the costs of accidents they cause. Without liability insurance, if you cause an accident, you may be personally responsible for paying for the other driver’s medical bills, car repairs, and other expenses out of your own pocket. This could leave you financially ruined, and unable to pay for basic living expenses like rent or groceries. By requiring liability insurance, the government is helping to protect both you and other drivers on the road.

Types of Liability Coverage

There are two main types of liability coverage: bodily injury liability and property damage liability. Let’s take a closer look at each one.

Bodily Injury Liability

Bodily injury liability coverage pays for the cost of injuries or death you cause to others in an accident. This includes medical bills, lost wages, and pain and suffering. Bodily injury liability coverage does not cover your own injuries or those of your passengers.

It’s important to note that bodily injury liability coverage has two limits: per person and per accident. The per person limit is the maximum amount of coverage available for each person injured in the accident. The per accident limit is the maximum amount of coverage available for all injuries sustained in the accident.

Property Damage Liability

Property damage liability coverage pays for the cost of damage you cause to other people’s property in an accident. This includes damage to their vehicles, homes, fences, and other property. Property damage liability coverage does not cover damage to your own vehicle or property.

How much Liability Coverage do I Need?

While each state sets its own minimum requirements for liability coverage, these minimums may not provide adequate protection in the event of a serious accident. Experts recommend that drivers carry at least $100,000 in bodily injury liability coverage per person, $300,000 in bodily injury liability coverage per accident, and $100,000 in property damage liability coverage per accident.

Of course, the amount of liability coverage you need ultimately depends on your individual circumstances. If you have significant assets or a high income, you may want to consider carrying more liability coverage to protect yourself in the event of a lawsuit.

FAQ

What Happens if I Don’t Have Liability Auto Insurance?

If you are caught driving without liability insurance, you could face fines, license suspension, and even impoundment of your vehicle. In addition, if you cause an accident without insurance, you may be personally responsible for paying for the other driver’s medical bills, car repairs, and other expenses out of your own pocket.

What is the Difference Between Liability Insurance and Full Coverage?

Liability insurance only covers the cost of damages or injuries you cause to others in an accident. Full coverage insurance, on the other hand, includes liability coverage as well as collision and comprehensive coverage, which can help pay for damage to your own vehicle in the event of an accident or other covered event.

Does Liability Insurance Cover Hit-and-Run Accidents?

If you are involved in a hit-and-run accident, your liability insurance will not cover the cost of the other driver’s damages or injuries. However, if you have uninsured motorist coverage, this type of coverage may help cover the cost of damages and injuries sustained in a hit-and-run accident.

What is the Difference Between Uninsured and Underinsured Motorist Coverage?

Uninsured motorist coverage helps cover the cost of damages or injuries sustained in an accident caused by a driver who does not have insurance. Underinsured motorist coverage helps cover the cost of damages or injuries sustained in an accident caused by a driver who does not have enough insurance to cover the full cost of the damages or injuries.

How Can I Lower my Liability Auto Insurance Premiums?

There are a few ways you can lower your liability auto insurance premiums. First, consider raising your deductible, the amount you pay out of pocket before your insurance kicks in. The higher your deductible, the lower your premiums will be. Second, ask your insurance provider if they offer any discounts, such as safe driver discounts or multi-policy discounts. Finally, shop around and compare quotes from multiple insurance providers to find the best rate.

In conclusion, liability auto insurance is a crucial type of coverage that every driver should have. By understanding the different types of liability coverage, how much coverage you need, and how to lower your premiums, you can make sure you are adequately protected in case of an accident.