Every car insurance policy can be broken down into separate groups or types of coverage. Each group covers a different aspect of an accident or damage, whether it is property damage, personal injury, or third party injury. Liability car insurance, the part that deals with insurance from lawsuits, is arguably the most important aspect of the entire policy. As such, it is required by the law in every state of the United States. Here is a step-by-step look at liability insurance.
What is Liability Car Insurance?
When an accident occurs on the road, usually one or more party is to blame for the accident. They either broke a traffic rule or drove recklessly or carelessly, resulting in the accident. Liability insurance covers the damage and bodily harm to the other party. No matter who is to blame, there’s a chance that one party will sue the other to account for the damages in the accident. It’s up to a judge to determine who was in the wrong for the accident. Liability car insurance comes in here as well; it covers the payment for the lawsuit after someone sues you and wins.
The State Mandates
Liability insurance is a requirement of nearly every state. Without the state minimum coverage for liability insurance, it is unlawful to operate a motor vehicle. Every state has its own rules and regulations regarding liability insurance, so it’s important to check with your insurance agent or make an inquiry at your state’s department of insurance to find out how much you need to be covered for. As every state’s requirements are different, so are the fines, so depending on where you live you could be tagged with anything from a fine to a revocation of your license for being underinsured.
The property damage portion of liability car insurance handles all the material damage done in the course of an accident (in which you are to blame). This could be the other person’s car, a house, or anything else that requires reparation. There is a minimum amount required for property damage coverage on a liability insurance policy, which again varies by state. This is usually expressed in a series of three numbers, such as 30/60/25. The “25” indicates that the minimum state requirement is $25,000 for property damage coverage.
Liability Car Insurance for Bodily Injury
The bodily injury section of liability insurance is responsible for paying for any physical harm that came to any person involved in a car crash. This minimum requirement is comprised of the first two numbers in the example above, 30/60/25. What this means is that you must carry at least $30,000 of coverage for individual injury, and $60,000 for the total amount needed in the accident. One single person in the accident can receive up to $30,000 from your insurance policy for medical bills, but if there were multiple people injured, the insurance company will pay up to $60,000.
Auto liability insurance is definitely one of the most important aspects of car insurance. Purchase liability insurance above the state minimums to be safe, and always maintain coverage to avoid fines and potential legal and financial issues.
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