When you buy insurance for your car, you buy different types of coverage. One of them is liability insurance. Your state probably requires that you have a minimum amount of liability insurance for your car and you may even need to buy it when you rent a car. You may wonder why liability insurance is important and what it covers. This type of insurance pays for damages to other people when an accident is your fault. Here's an overview of what liability insurance covers.
Damage To Someone's Property
If you hit another car, then liability insurance pays for damage to that car but not the damage to your car. You also carry collision insurance, and this pays for your car's damage. Property damage liability pays for damage to property besides cars too. If you run off the road and knock down a fence or do other property damage, liability insurance covers the cost. This insurance has a cap of a maximum amount that will be paid out per accident. There's a minimum amount of coverage that's required by your state, but you can buy additional coverage if you want.
Injury To A Person
If you cause an accident and another person is hurt, then your liability insurance covers their medical costs and lost wages up to the amount of your coverage. However, liability coverage doesn't pay for your own medical bills. Those are covered by an additional policy called medical payments coverage. Bodily injury liability insurance has two types of caps. One is the maximum amount paid per person that's hurt, and the other is the maximum amount that is paid out per accident if multiple people are hurt.
This type of liability insurance also has a state minimum amount of coverage, but you may want to add more. If one or more people are hurt and the medical bills exceed the limit of your policy, then you would be responsible for making up the difference. Your insurance agent can help you decide on the right maximum limits for each type of liability insurance for your best protection and that fits your budget.
When you want to increase the amount of liability coverage for better peace of mind, your insurance premiums will go up. You might counter this by increasing your deductible or looking for other ways that allow you to have better coverage at an affordable cost. Liability insurance is important because medical bills can be very costly and you don't want to pay them out of your own pocket when your insurance policy will cover them if you have the right protection.
If you need auto insurance, contact an agency such as Phillip R Davis Insurance.