Liability insurance is an essential part of almost any car insurance policy. In fact, in almost every state, drivers are required by law to enforce their policies.
What is Liability Insurance?
There are mainly two types of Liability Car Insurance and each covers different coverage:
Property Damage Liability Coverage
Property liability insurance, often referred to as “PD” coverage, covers damage to the property or business of others, as well as loss of use of that asset.
- This means that your actions caused property damage (car, house, tree, etc.) and you are legally responsible for such damage.
- Your PD Coverage pays the appropriate bills, such as:
- Car Repair.
- Also, fix a broken living room wall
- Remove the broken tree.
Liability Insurance Limits
You can choose the restrictions your insurance company covers, as long as they are at least equal to the minimum coverage limits in your country. You are liable for any damage beyond the limits of your insurance policy. There are usually three limits shown in your policy, e.g. B. 100/300/100. If you have an insurance policy with a cap of 100/300/100, you are subject to:
- $ 100,000 for each injury.
- $ 300,000 total injuries per accident.
- $ 100,000 in monetary damage for each accident.
Why should you consider liability insurance more, not less?
While most states require drivers to have basic liability insurance that includes minimum coverage levels required by law, it is a good idea to purchase coverage levels higher than your state requires.
Why? For example, suppose you get distracted leaving the parking lot and you don’t see a car behind you accidentally driving next to you. He then collided with the car, the driver and front passenger were slightly injured.
After investigations, he decided to “make a mistake” in the accident. Motor vehicle liability covers damage to the vehicle you are working on, as well as medical bills (and other costs) for injuries to the driver and passenger, including pain, suffering and lost wages.
If your claim is greater than your chosen liability, you can be personally liable for any costs incurred by the debtor in excess of what your insurance policy can pay. Failure to pay these bills can result in increased wages, property rights, and even legal costs.
How Much Car Liability Insurance Should You Get?
The minimum statutory liability insurance required by law varies from state to state, so your premium may also vary from state to state if you purchase additional liability insurance.
The premium increase is usually less than expected. Remember: your monthly premium with additional debt coverage will almost certainly be less than your costs in the event of an accident and without adequate coverage.
If you choose not to take out additional liability insurance, ask yourself, “If I am responsible for an accident, how much can I pay out of pocket?”
Small “shields” are often fully covered by the minimum liability limits set by your state. But it only takes one accident to disrupt life, as you know.