Auto Liability Insurance

What is Auto Liability Insurance?

Automobile liability insurance protects drivers in the event that they, while operating a vehicle, damage another person or property. Liability auto insurance does not cover the driver or the vehicle, but only covers damages suffered by the third person and their property. 

There are two main components of liability auto insurance

Do I Need Auto Liability Insurance?

Liability coverage is a part of your car insurance policy that allows you to drive with peace of mind. Accidents can happen unexpectedly, so it is best to protect your assets in case you’re found guilty. 

If you have commercial insurance, the insurance company will compensate for the medical and property damage expenses of the third party up to preset limits, if you are found at fault in case of an accident. 

Here’s why every driver can benefit from liability only insurance

  • Provides financial protection to the at-fault driver in a car accident 
  • It covers the medical expenses of people involved in the accident caused by you 
  • Saves the driver from incurring a monetary loss in paying for repairing costs of vehicles or other property of the third party injured in the accident

Bodily Injury Liability

If you are found guilty in a car accident, bodily injury liability (BI) will help pay for the injuries suffered by the third person, and the loss of income resulting from said injuries. It saves you from paying for these medical expenses out of your own pocket. 

Bodily injury liability covers the following: 

  • Medical Expenses
    BI covers the injured person’s ongoing medical expenses, including emergency services and extended hospital care. It helps pay for any necessary medical treatment or equipment like X-rays, wheelchairs, and follow-up doctor visits. 
  • Compensation for Loss of Income
    If the person you injured in a car accident is unable to go to work, or perform at work as a result of the injury caused, bodily injury liability will help compensate for this monetary loss that the injured person suffers till the time of recovery. 
  • Legal Fees
    If you are found guilty in an accident, the injured party may take it up in court. In such an event, bodily injury liability helps pay your legal fees, saving you from seeking legal counsel, which may transcend your budget.

What Does Bodily Injury Liability Cover?

BI does not pay for the injuries suffered by you, if you are the cause of the accident. It helps compensate for the injuries caused to:

  • Another driver
  • A pedestrian
  • Passengers in your own vehicle

However, liability auto insurance benefits you as you don’t have to pay for the expensive medical bills and ongoing treatment of another person/s from your own pocket. It also covers your legal costs in case of a lawsuit.  

Bodily Injury Liability Insurance Coverage Limits

A liability only insurance limit is the maximum amount of money your insurance company will be liable to pay for a covered claim. 

Generally, bodily injury liability has two limits:

  • Per person limit
  • Per accident limit

Per Person Limit

This preset limit is the amount your insurance company will pay for the medical expenses of each person injured in the accident. 

If the total limit is $30,000, the company will bear medical costs up to $30,000 for each person involved, and nothing beyond this limit. 

Per Accident Limit

The liability limit per accident is the total amount your insurance company will pay for the combined medical expenses of all the people injured in an accident by you. 

If the per accident limit is $100, 000, the insurance company will pay nothing beyond this to the injured parties, no matter how many people are involved.  

How Much Bodily Injury Coverage Do You Need?

Generally, your state will dictate the minimum liability auto insurance limits for you.  However, you should be mindful that if the medical expenses of injured persons in an accident caused by you exceed your BI coverage limit, you will have to bear these costs out of your own pocket. This is why it is preferable to choose bodily injury coverage higher than state ordained limits.

Minimum Bodily Injury Liability Coverage in California

  • $15,000 per person
  • $30,000 per accident

Property Damage Liability

If you are at fault in a car accident, the property damage liability will help cover all damages to a third person’s vehicle or property. It saves the driver from paying for damages that may exceed their budget in case of extensive destruction.

Property Damage Liability covers the following:

  • Damage to a third person’s vehicle
  • Damage to a third person’s property, such as a lamppost, fence, gate, or house, up to the selected amount
  • Legal fees if you are sued as a result of the accident

Liability only insurance does not include damage to your own vehicle. For that, you may apply for collision coverage, which will then help cover the repair costs of your automobile.

Who Needs Property Damage Liability?

In many states, this particular insurance is required by the state. If you have insurance filing on your commercial insurance policy, it is mandatory to have property damage liability as well.  

However, in either case, property damage liability protects you and your assets in case you cause a car accident, so it is best for everyone to prepare for the worst. 

How Much Property Damage Coverage Do You Need?

Every state requires a driver to have a minimum liability auto insurance limit, which differs from state to state. Having a higher preset limit will save you from paying compensation from your own money. The higher you set your liability auto insurance coverage limit, the higher your insurance premiums are likely to be. 

You may choose one of the following plans:

  • Combined Single Limit (CSL) 
    This is the maximum limit your insurance company will pay for all damages resulting from one accident. 
  • Split Limit 
    This coverage amount is divided into three limits, the bodily injury coverage per person per accident, the total amount payable per accident, and the property damage limit per accident. 

Minimum Property Damage Liability Coverage in California

Property damage liability coverage: $5,000 

How Much Liability Auto Insurance Do You Need?

If you are at-fault in an accident, any expenses that exceed your liability only insurance limit will fall on your shoulders, and you will have to pay them out of your own pocket. Therefore, it is a good idea to exceed the state’s minimum liability auto insurance limits to be on the safe side. 

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Since everyone’s liability auto insurance needs are different, Contact Us to get a personalized recommendation and charter an insurance plan exclusively for you.

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