Liability Coverage Auto Insurance: What You Need to Know

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Liability coverage auto insurance is an essential component of your auto insurance policy. This coverage is designed to protect you from financial loss if you cause an accident that injures someone or damages their property. In this article, we will explore the basics of liability coverage, its different types, and what you need to know to make sure you have adequate coverage.

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What is Liability Coverage Auto Insurance?

Liability coverage auto insurance is the most basic type of coverage that all drivers are required to have by law. It covers the costs of damages or injuries that you may cause to other people in an accident. If you are at fault in an accident, your liability coverage will pay for the other driver’s medical bills, car repairs and any other damages or losses they incur.

The amount of liability coverage that you need depends on various factors, including the value of your assets and the minimum insurance requirements in your state. For example, if the total damages in an accident you caused exceed your insurance limits, you could be held liable for the remaining cost.

Types of Liability Coverage Auto Insurance

Liability coverage auto insurance comes in two forms: bodily injury liability and property damage liability. Here’s a closer look at each type:

Bodily Injury Liability

Bodily injury liability coverage pays for the medical bills, lost wages, and pain and suffering of the other driver and passengers if you’re found to be at fault in an accident. It may also cover legal fees if the other party decides to sue you for damages beyond what your limits cover.

The amount of bodily injury liability coverage you need varies by state. In most states, the minimum coverage is $25,000 per person and $50,000 per accident. However, you may want to consider purchasing more coverage if you have a high net worth or assets to protect.

Property Damage Liability

Property damage liability coverage covers the cost of repairing or replacing the other driver’s car or property if you’re found to be at fault. It may also cover other damages you cause, such as damage to a fence, a building or a mailbox. The minimum coverage for property damage liability is usually $10,000, but you may want to consider purchasing more if you own property or valuable assets that could be damaged in an accident.

FAQs About Liability Coverage Auto Insurance

To help you better understand liability coverage auto insurance, here are some frequently asked questions:

Question
Answer
Is liability coverage auto insurance required by law?
Yes. Liability coverage is mandatory in all states except New Hampshire and Virginia.
Does liability coverage auto insurance cover my injuries?
No, liability coverage only covers the damages and injuries you cause to others.
Can I change my liability coverage limits?
Yes, you can usually change your coverage limits at any time by contacting your insurance provider.
Will my liability coverage auto insurance pay for damages if someone else is driving my car?
Yes, liability coverage applies to anyone driving your car with your permission, as long as they are not explicitly excluded from your policy.
How much liability coverage do I need?
The amount of liability coverage you need depends on various factors such as your net worth, the value of your assets, and your state’s minimum requirements. You should speak to an insurance agent to determine the adequate amount of coverage for your situation.

Conclusion

Liability coverage auto insurance is an essential component of your insurance policy that protects you from financial loss if you cause an accident. There are two types of liability coverage: bodily injury liability and property damage liability. While the state minimums for liability coverage are usually low, you may want to consider purchasing more coverage if you have valuable assets to protect. If you’re unsure about how much liability coverage you need, speak to an insurance agent to ensure you have adequate coverage.

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