In most parts of the United States, liability auto insurance is required by law. Some states have passed financial responsibility legislation requiring drivers to either buy this type of coverage or make a cash deposit to demonstrate they have the means to pay for damages they may cause in an accident.
Liability coverage is something that pays for injuries sustained by the occupants of the other vehicle in an accident. This part of the policy pays for medical bills and related expenses. It also pays for a funeral if the accident was a fatal. one.
When looking at quotes for liability auto insurance coverage, the insurance company will provide two numbers. The first one is the policy limit to compensate one accident victim. The second number reflects the level of coverage available to pay for injuries of all people injured in the same accident.
Property damage coverage is used to pay for repairs to the other driver’s vehicle. It also pays for repairs to public property damaged or destroyed in the accident, such as sheds, fences, sign posts and light stands.
Depending on the state, uninsured and underinsured motorist coverage may also be required for all drivers. Uninsured motorist coverage pay for injuries sustained by the policyholder and his or her passengers when the at-fault driver does not have any insurance. Underinsured motorist insurance coverage makes up the difference between the at-fault driver’s coverage limit and the actual damages caused.