Liability Car Insurance

What Does Liability Auto Insurance Cover?

Automobile liability insurance provides liability coverage to the owner in event of an accident. All states in the United States require some level of auto liability insurance coverage. However, different states enforce the insurance requirement differently.

In Virginia, residents must pay the state an annual fee per vehicle if they choose not to get liability insurance. North Carolina has made it mandatory for the drivers to hold liability insurance to become eligible for the driver's license. In California and New Jersey, law prevents uninsured drivers from recovering non-economic damages such as compensation for pain and suffering if they have got injured while operating an automobile.

Liability insurance pays for damage that an automobile driver may cause to others. Owners can buy two types of liability coverage under a liability car insurance policy –  Bodily Injury Liability Coverage and Property Damage Liability Coverage.

Car owners can buy bodily injury liability coverage which pays for medical bills and lost wages. When an accident involving the policyholder causes bodily injury to other people, they can move to the court of law demanding compensation from bodily injury. If such happens, the bodily injury liability coverage provides legal shield to the insurance policyholder.

Property damage liability coverage pays for property damages caused to others in a car accident by the policyholder. This kind of liability car insurance pays the repair and replacement costs of the accident. If the suffering party files a lawsuit against the policyholder for recovering property damages, this sort of coverage would help the policyholder.

You might have seen automobile policies described by three numbers such as 40/100/35. These numbers are called the split limits of liability insurance. It indicates that the coverage is provided for  $40,000 worth of bodily injury caused to another person, $100,000 for bodily injuries caused to everyone and $25,000 worth of property damage.

While the insurance does shield the policyholder from the financial liability of an accident, the amount one is financially responsible for may still exceed the liability coverage limits. It is advisable to choose the highest limit of insurance that your budget allows for. Proper insurance cover would help you to get over unforeseen financial liability.

While many expenses due to an accident are covered (as listed above), the amount you are financially responsible for may still exceed your liability coverage limits. It is recommended that you look at all coverage options available from a variety of providers and choose the highest limit that your budget comfortably allows for.

State laws in the United States determine the minimum amount of liability insurance that an automobile owner must buy. However, the law does not impose any upper limit and one can buy as much coverage as one is willing to do. Increasing the upper limit also makes you eligible for several extra benefits  offered by the companies such as towing fee coverage and rental car reimbursement. The additional insurance coverage would enable you reduce the out-of-pocket expenses associated with an accident and ease your financial burden substantially.