What is liability car insurance?
Car liability insurance is a specific type of car insurance that covers injuries or damage that you cause in a car accident. There are two types of liability insurance.
An accident is never a good thing. Many times, this is not what you want. Even if you consider yourself a great driver with a crystal driving history, you can’t always control your surroundings. Anything can cause accidents, weather, traffic and even common disturbances. This is precisely the reason why civil liability insurance was created to protect drivers in case of a guilty accident.
What does liability car insurance cover?
PROPERTY DAMAGE LIABILITY
If you have an accident that damages a vehicle or other property, this type of insurance covers the repair costs up to the amount insured. Abbreviated as PD, it also covers the costs of court and defense for the driver if sued as a result of the accident. The 50 states require PD coverage.
BODILY INJURY LIABILITY
Car liability insurance for bodily injury, or BI, covers the medical expenses of the injured parties if it is determined that you were at fault in an accident. It also covers the loss of income if the injuries prevent the person from working. All states, except Florida, require drivers to have BI insurance.
Expenses that are not covered by liability car insurance.
Collision and medical payments.
Collision: Collision insurance is used to cover damage to the policyholder’s vehicle in the event of an accident. Lenders need this type of insurance if the car has a loan or lease. Once the vehicle is paid for, it is optional but is still recommended for those who drive vehicles with a good market value.
Medical: covers personal injury expenses in an accident.
Liability insurance coverage and out-of-pocket cost
When it comes to liability insurance, “less is more” is not a good policy. While every state has a mandatory minimum, it is always a good idea to buy more cover. Higher coverage can protect you and your assets and reduce the amount you have to pay out of your pocket in the event of an accident.