Basics of Auto Insurance: Liability Insurance

When drivers are looking for auto insurance, liability insurance is a topic which is going to come up. This type of coverage includes bodily injury and property damage coverage.

Bodily injury insurance provides the following protection to policyholders:

  • Emergency medical care at the scene of the accident
  • Medical bills for injuries incurred in the accident
  • Lost wages if the accident victim is unable to work for a time or is disabled
  • Funeral expenses (if one or more occupants of the other vehicle are killed)
  • Legal fees for defending legal action stemming from the accident

Property damage insurance coverage is used to pay for the following:

  • Cost to repair or replace the other driver’s vehicle
  • Damage to buildings, fences and sheds
  • Repairs to other objects (sign posts, light stands, mail boxes, etc.)

State law sets out the minimum level of this type of protection that drivers must have in place. It’s possible to be the at fault driver in an accident where the level of damage caused is higher than the amount of coverage in place. The unfortunate driver who finds him or herself in that situation is expected to make up the difference personally.

Rather than make the difficult decision to sell assets to pay for the damages, buying a policy with a higher limit is a much better decision and all drivers should educate themselves about the basics of auto insurance, including liability insurance.