Imagine you were involved in a car accident, causing bodily injury to three people. You wrecked someone else’s car and you damaged a property nearby. Much as we don’t want this scenario to occur, the truth of the matter is, accidents happen. If this ever happens to you, do you have the means to pay for all the damages you caused? This is where auto liability insurance comes in.
Liability Car Insurance Explained and Why You Need It
If in case you run into a car accident in which you are found to be at fault, liability car insurance comes to your rescue by paying for the cost of damages you brought to other people and their property.
Liability car insurance has two components:
Bodily Injury Liability Coverage (BI)
Includes coverage on hospitalization, treatment, and loss of income as a result of the accident and legal fees in case of a lawsuit
Property Damage Liability Coverage (PD)
The cost of repair or replacement and other expenses concurrently incurred will be taken care of under property damage liability coverage.
Auto liability coverage extends support to accident victims. However, it does not cover the cost of the repair or replacement of your car.
It also does not cover your own medical expenses for injuries you sustained during the accident. You would need collision coverage for the former, while you would need medical payments coverage or personal injury protection for the latter. Nonetheless, you cannot purchase the said coverages without liability insurance. Add to that, all states, save New Hampshire, require liability insurance.
How Much Is Enough When It Comes to Liability Insurance?
There are varying ways to gauge the “limit”. Here a few terminologies you need to familiarize yourself with:
Liability Limit for Bodily Injury Per Person
This is the maximum amount that the insurance company will pay for each person injured during the accident.
Liability Limit for Bodily Injury Per Accident
This is the limit to the amount that the insurance company will cover for all the people injured.
Liability Limit for Property DamageThis is the cap for which your insurance policy will pay for all the property damage caused by the accident. There is a minimum coverage or limit depending on which state you are in. However, since liability car insurance principally aims to protect your finances, it is recommended that you purchase liability insurance above what is required, especially when you have a high net worth.
The more you own, the higher the liability insurance you need because the affected parties could go after your assets. Imagine the worst thing that could happen and ensure that your liability insurance is enough to cover all the expenses that could arise due to the accident you caused. In a nutshell, liability car insurance gives you peace of mind and assurance that you would not have to face bankruptcy if you are suddenly faced with expenses—from an accident that caused injuries to people and property damage—because you were found at fault.
There’s no foretelling when accidents happen. Nevertheless, it is better to be insured and not use it rather than not having the option at all.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.