Liability insurance is an essential type of auto insurance coverage that protects you in the event that you are found responsible for causing an accident. If you’re not familiar with liability insurance or are unsure about whether you need it, read on to learn more.
What is Liability Insurance?
Liability insurance is a type of auto insurance that pays for damages or injuries that you may cause to others in an accident. This can include damages to other vehicles, property, and injuries to other drivers or passengers. Liability insurance is typically required by law in most states, and it’s important to have enough coverage to protect yourself from financial liability in the event of an accident.
Types of Liability Insurance
There are two main types of liability insurance: bodily injury liability and property damage liability.
Bodily Injury Liability: Bodily injury liability covers the cost of injuries sustained by other drivers or passengers in an accident that you are found responsible for causing. This can include medical expenses, lost wages, and other damages.
Property Damage Liability: Property damage liability covers the cost of damage to other vehicles or property caused by an accident that you are found responsible for causing. This can include the cost of repairing or replacing the other vehicle, as well as any other property that was damaged.
Limits and Deductibles
When it comes to liability insurance, it’s important to understand your policy limits and deductibles. Policy limits refer to the maximum amount that your insurance company will pay out in the event of an accident. For example, if you have a $100,000 policy limit for bodily injury liability, your insurance company will pay up to $100,000 in damages for injuries sustained by other drivers or passengers in an accident that you are found responsible for causing.
Deductibles refer to the amount that you’ll need to pay out of pocket before your insurance coverage kicks in. For example, if you have a $500 deductible for property damage liability and you cause $2,000 in damage to another vehicle, you’ll need to pay the first $500 out of pocket, and your insurance company will cover the remaining $1,500.
Liability insurance is an important type of auto insurance coverage that can protect you from financial liability in the event of an accident. It’s important to understand the different types of liability insurance, your policy limits, and deductibles to ensure that you have enough coverage to protect yourself. If you have any questions about liability insurance or other types of auto insurance coverage, be sure to consult with an insurance professional who can help you make informed decisions about your coverage needs.