Liability insurance acts as a means of paying for damage that you caused to another person in an auto accident. For example, if you lost control of your vehicle and hit the car of another driver, you are liable to pay for the damage that occurred. Through liability insurance, your insurance provider will be the one to pay for the repair or replacement costs as well as any medical expenses that the victim of the accident sustained.
Liability coverage falls into two distinct categories: Bodily Injury Coverage and Property Damage Coverage
- Bodily Injury Coverage – Bodily injury coverage under liability insurance helps to protect you if you were the reason behind a car accident. This enables you to pay for the medical costs of the victim of the crash, for their lost wages during their recovery period, emergency medical expenses, and even your legal fees if they decide to sue you.
- Property Damage Coverage – Under this aspect of liability insurance, property damage coverage pays for the damages that you caused to the property of someone else. For example, if you hit another car, a house or even a storefront property, this type of liability insurance enables you to pay for the structural damage, repair or replacement costs, and even helps to protect your assets in case the owner of the property decides to sue you.
From this, you can see that liability insurance applies to both people and cars since car accidents affect more than just the car themselves but the people in them as well.
Liability Insurance Payout System
Under your liability insurance policy is a per person, per accident, and per instance of property damage limit. For example, a limit of $50,000 per person, $300,000 per accident, and $100,000 per case of property damage is common among many liability insurance policies. If the injured party in the lawsuit wishes to claim more than what the coverage provides, the cost of the extra payment could come out of your own personal finances. However, most accidents are usually sufficiently covered by your policy, and it is only in very rare occasions that monetary compensation exceeding what is indicated in the policy is demanded and approved by the court system.
Is Liability Insurance Necessary?
Most states require drivers to have some form of liability insurance, though there are no minimum limits. This results in many instances of inadequate liability coverage. The problem with driving without liability insurance is that, if you get into an accident, you will not have an alternative recourse to paying for the damages that you caused. Not only that, it is illegal in nearly all states to drive without insurance. So on top of your damages expenses, you will also have additional legal punishments handed to you.
When you start driving for the first time, the one action that should be on the top of your list of things to do is to search for and compare liability insurance for cars on sites like CoverHound. By doing so, you are not only abiding by the law, you are also ensuring that the process for reimbursing the other driver goes smoothly.
Does Liability Coverage cover me?
A policyholder is not eligible to have the same bodily injury and property damage coverage. The problem with allowing liability coverage for both the victim and the owner of the policy is that this can lead to instances where a person may intentionally get into an accident so that they can collect on the policy payments. However, there are some exceptions to this in cases where both individuals that were in an accident were found to be at fault. In cases like this, both liability coverages can go into effect, but it is still dependent on the police report and the evidence that the individual policyholders can present.
Determining Fault During a Car Accident
Insurance companies decide who’s at fault in an accident based on the following:
- The Police Report – The police report of the accident is the main source of information for insurance companies when it comes to determining fault in an accident. If you ever find yourself in a situation where you need to inform a police officer regarding the particulars of a car crash, be sure to be as clear and concise as possible and prove that it was not your fault through facts and not fiction.
- Evidence Presented – Aside from a police report, the evidence at the scene of the accident also plays an important role since it can help determine whether one of the drivers was under the influence of alcohol or was negligent in causing the crash in the first place.
All in all, do what’s right and be sure to have adequate liability insurance coverage before operating a vehicle. Even if you’re an experienced driver, accidents can still happen at any time.