Liability Coverage Car Insurance Definition, Limits, and Cost

Liability car insurance is one of the important financial coverages when you are found legally responsible for an incident. Including accidents that result in injury, property damage, and even death. Let’s learn more about the liability coverage car insurance definition, limits, and cost to see whether you need it!

What is Liability Car Insurance?

Auto liability insurance definition is part of a car insurance policy that provides financial protection for drivers who injure other people or their property while operating a vehicle. However, car liability insurance only covers injuries or damages to third parties and their property.

In other words, liability insurance doesn’t cover the driver or the driver’s property, which may be covered separately by other parts of their policy. Furthermore, these liability car insurance parts are bodily injury liability and property damage liability.

In most states, if the driver is found to be at fault in the accident, their insurance company will pay for the third party. It means the insurance will cover the property and medical expenses of other parties involved in the accident up to the limit set by the policy.

But, in states that don’t have no-fault car insurance, drivers involved in an accident must first file a claim with their own insurance company regardless of who is at fault. In these states, drivers are usually required to buy personal injury protection (PIP). So the PIP will cover their accident-related medical expenses and the passengers.

What is the Liability Coverage Car Insurance Definition?

This liability car insurance is purposed to be responsible for the medical bills incurred by the injured party If you’re at blame for a collision. Plus, the costs associated with the resulting property damage.

Whilst policy specifications vary from one provider to another, liability insurance usually includes bodily injury and property damage. Below is each liability coverage car insurance definition:

1. Bodily Injury

The first liability auto insurance coverage is bodily injury coverage which covers the at-fault driver. So they’re not liable for other people’s emergency and ongoing medical expenses, loss of income, or funeral costs. Moreover, this also helps cover the policyholder’s legal fees when the accident results in lawsuits.

2. Property Damage

The property damage liability is designed to help cover the cost of repairing or replacing the vehicle of the other driver involved in the accident. Also, this coverage will cover damage done to other forms of property caused by the policyholder’s vehicle. For instance fences, mailboxes, or buildings.

What Does Car Insurance Cover?

If you’re found liable for damages resulting from an accident, this coverage can pay up to the limits you choose and can provide legal defense if you’re sued. As you know from the previous section it provides the bodily injury and property damage coverages. These costs are some of the types of damages that may be considered:

  • Medical and hospital bills
  • Pains and suffering
  • Rehabilitation services
  • In-home healthcare services
  • Missing wages

In addition, liability insurance provides important protection for drivers, and most states require drivers to carry a minimum amount of liability insurance. The majority of states require drivers to carry motor vehicle liability insurance.

However, some companies have their own coverage so you can contact your local independent agent. So, ask about the auto liability insurance that is right for you and the types of auto liability insurance coverage.

What is Not Covered by Liability Car Insurance?

Liability will typically not pay to repair damage to your car after an accident. But collision coverage will help with this. Furthermore, it also doesn’t pay to repair damage caused by other factors, such as hail-that’s where comprehensive coverage comes in.

Although liability coverage helps pay for the medical expenses of someone you injure, it doesn’t pay for your injuries. So you should consider medical payments coverage or personal injury protection, depending on which state you live in.

What Are Liability Insurance Coverage Limits?

Basically, the amount your insurance company will pay for a liability insurance claim depends on the coverage limits you choose. Additionally, each state sets its minimum coverage limits for property damage and bodily injury coverage that drivers must purchase. But you have the full right to decide whether to add additional coverage or not.

Here are three liability coverage limits that are available in your car insurance policy:

1. Property Damage Liability Limit

It’s the maximum amount that your insurance company will pay to repair the damage that you cause to another party’s property. However, the maximum payment won’t exceed the limit you have set.

2. Bodily Injury Liability Limit

The bodily injury liability limit is divided into per person and accident. The bodily injury limit per person is the maximum payout amount for each person injured in an accident you cause.

Meanwhile, the bodily injury liability limit per accident is the total amount that your insurance company will pay for all medical costs for one accident that’s your fault. Keep this limit at an amount that you’re pleased with-it is needed to help cover for some people’s medical expenses.

How Much Does Liability Coverage Car Insurance Cost?

The nationwide average car insurance cost for minimum car insurance is $685 per year, according to a recent NerdWallet rate analysis.  This price typically includes liability car insurance and other state-mandated coverage.

However, this average expense can go up to $1,044 per year, if you have an accident caused by an error in your record. As for drivers who have a recent DWI or DUI, the cost of minimum coverage averages $1,403.

Regardless, auto insurance rates vary widely by state and are also affected by several factors. It encompasses age, personal driving history, car make and model, state, and credit score.

Do You Need Liability Coverage Car Insurance?

After knowing the liability coverage car insurance definition, limits, and cost, have you know the importance of it? Indeed, it’s important to have this liability coverage as a driver to protect you from financial damage.

Aside from that you should consider your needs to ensure this coverage will protect you in the future. However, before purchase and insurance, you should compare all companies and the policy to ensure the right purchase. So we hope our article can help you get the best car insurance liability!