All states in the United States require drivers to carry at least liability insurance when operating a vehicle. Liability insurance is a basic type of coverage that will pay for the other party’s medical expenses and for repairs on the other party’s car. This type of insurance does not cover expenses for the person responsible for the accident. Motorists will need collision insurance or comprehensive insurance to cover the costs of damage to their own vehicle and any medical expenses that the driver and passengers incur.
How Liability Insurance Works
Liability insurance is actually comprised of two types of coverage: bodily injury liability (BI) and property damage liability (PD).
Bodily injury liability covers the costs of injuries or death, and may pay for expenses such as medical bills, pain and suffering, and loss of income. It’s important to remember that this level of coverage only pays for the bodily injuries of the person or people in the other vehicle – not the vehicle of the person who caused the accident. Coverage is also limited based on the limitations and statues set forth by the state. The amount of coverage also depends on your policy.
Property damage liability covers the costs of damages to someone else’s property in the event of an accident. If your car hits a fence, damages a part of a house, or collides with a storefront, property damage liability will cover the costs associated with the incident, up to the insurance coverage limit. If the cost of damages exceeds this limit, you will need to pay for the excess costs out of pocket.
Liability Insurance Coverage
When people are injured in a car accident or there is extensive property damage, liability insurance will pay for the following types of expenses:
– Medical expenses for bodily injury
– Medical services associated with the incident
– Emergency assistance at the scene of the accident
– Loss of income as a result of the accident
– Legal defense fees or bail bonds for anyone that is listed on the insurance policy
– Funeral expenses in the event of death from the accident
– Property damage to homes, storefronts, fences, walls and government property
– Vehicle repairs for the other driver’s car
– Vehicle replacement costs for the other driver’s car
When purchasing liability insurance from your auto insurance provider, it’s important to review the coverage limits and make sure you are comfortable with the amount you would be responsible for paying if costs exceed the minimum requirements. Some states allow drivers to purchase extended liability coverage which can provide more protection and help to cover more of the costs in the event of a serious accident.