Understanding Liability Auto Insurance Coverage
When you purchase auto insurance there are several different kinds of coverage you can include on your policy. Liability coverage is one type of insurance that is required by every state in the US for every car owner to have. This type of coverage insures you when you are at fault for an accident which causes injury or damage to the property of another party. It will pay medical costs and repair or replacement costs that are incurred by another party in the accident.
Auto liability insurance coverage is divided into two different areas of coverage which are bodily injury and property damage. The names given to these two types of coverage are pretty much self explanatory. Bodily injury, of course, pertains to medical bills for any person who was hurt or injured in an accident which was the fault of the insured. Property damage is coverage for any costs to repair or replace a damaged vehicle or other property belonging to any person involved in the accident.
As mentioned earlier, all states in the US require a driver or car owner to have liability coverage before they can legally operate their vehicle. These states have a minimum amount of coverage that is mandatory, but the insurance companies will offer you coverage in larger amounts if you want it. Liability coverage limits are usually stated either in what is called split limits, or a combined single-limit. For example, your policy might state the split limits as 50/100/50. In this case, the 50 stands for $50,000 and would represent the most the policy would pay for bodily injury for each person injured. The second number would be $100,000 and would be the most paid by the policy per accident. The final number would represent $50,000 and is the most the policy would pay for property damage per accident. A combined single-limit policy might state $100,000 as representing the maximum payable for bodily injury and property damage together.
Of course, it is possible to save money on your auto liability coverage by purchasing only the minimum amount required by your state. However, you might be wise to consider purchasing more than the minimum. If you should have an accident where you are at fault, you might end up paying a lot of money out of your own pocket if your liability coverage is not adequate to pay all the costs you are responsible for. Having to pay a little higher insurance premium will be much preferable to the hundreds or thousands you might otherwise be responsible for.