Liability Auto Insurance Coverage Basics

Liability auto insurance coverage is put in place to protect the policyholder from being personally responsible for paying for damages he or she causes in an at-fault accident. It is known as third-party liability insurance because it does not protect the policyholder personally; it covers the occupants of the other vehicle.

This type of coverage is used to pay for medical bills and economic loss stemming from an automobile accident. The policy language sets a certain limit for the injuries and damages incurred by a single accident victim and a higher one for all people injured in the same accident.

Property damage liability coverage pays for repairs to the other driver’s vehicle following the accident. If the other car is totaled, the policy pays out based on the vehicle’s cash value. This part of the policy also pays for the cost of repairing any public property damaged in the incident. Public property includes sign posts, mail boxes, fences, buildings and sheds in this instance.

While auto insurance companies licensed to sell policies offer liability auto insurance coverage, it doesn’t mean that they all charge the same amount for this type of protection. Buyers should make a point of requesting quotes from several providers and considering the coverage terms offered carefully before making a buying decision.

Depending on the state, a driver may be required to buy at least a set minimum level of liability auto insurance coverage. Consumers can choose to put a higher level of protection in place by purchasing a policy with a higher limit if they wish.