In reference to car insurance, liability insurance is something one must not overlook. Though it is required in some form or another in all 50 states in America, it’s important to understand how much coverage you need.
Liability coverage will protect the insured driver from any damages done to property or individuals in a car accident. When one begins to look around for a Liability Car Insurance Policy, there are going to be two main components to each.
Property Damage Coverage
When a car accident occurs, if any property damage is caused to the other drivers vehicle or property, Property Damage Coverage protects the insured from any liability for expenses incurred.
- Structural Damage. Property Damage Liability coverage protects the insured driver from any damages caused to property including homes and commercial property.
- Vehicle Repair. If a vehicle involved in an accident needs repair, Property Damage Coverage protects the insured from any costs. This coverage also will protect the insured in the case of a total loss claim is made by the other driver.
- Repair/Replacement of Stationary Objects. During an accident, some things may be damaged like telephone poles, or electrical boxes. If this is the case, this coverage protects the driver from the cost of replacement or repair of those items.
Bodily Injury Coverage
In the event the insured is involved in an auto accident that results in an injury to another individual, the Bodily Injury coverage will pay for any necessary expenses. These expenses may include the following.
- Medical Expenses. If anyone involved in the accident requires medical care, liability insurance will protect the insured from paying for the medical expenses out of pocket.
- Loss Of Income Compensation. If an individual involved in an auto accident caused by the insured driver has lost wages due to the inability to work, bodily injury coverage will pay those lost wages.
- Emergency Services. If it is required that emergency services be called to the accident scene, the insured is covered from any state or local charges that may apply.
- Legal Defense/Bail Bonds. Bodily injury coverage will also pay for any legal fees the driver may incur as a result of the accident. If the insured driver is detained for any reason, this coverage may also provide funds for bail.
- Funeral Costs. In the unfortunate event that the insured driver, or anyone involved in the car accident perishes, the policy will provide funds to pay for any funeral expenses required.
How Much Liability Car Insurance Coverage Is Needed
When one is involved in an auto accident, they rarely realize all the costs involved for the insurance company. While there may only be a few thousand dollars worth of damage done to the vehicle, it’s the other damage done that really adds up. For instance, if during the accident, a telephone pole was taken out, the insurance company has to pay to replace that and all the labor that comes with it. If one did not have sufficient Liability Car Insurance coverage, they may be left with a very large bill from the electric company. It should also be observed that an Aggregate Limit will usually be imposed on a liability insurance policy. This restriction will commonly put a cap on the total amount insurance claims cannot exceed.
The general rule of thumb, is to purchase as much as one can afford. While it may seem easier to take the cheapest way out, the possible negative impact a lack of coverage can produce is very significant. It’s important to talk with an insurance agent before purchasing any policy, to discuss what options benefit the insured most.