Liability in auto insurance in a tort system means that the insurance company investigates each accident to determine which driver is at fault, and to what extent. It’s possible for a driver to be found 100 percent responsible for the accident. The investigation may also determine that both drivers share some responsibility for the accident.
In a tort state, drivers buy third party liability coverage to pay for injuries and damages claimed by the occupants of the other vehicle. Bodily injury coverage pays for medical bills and economic loss following the accident. It also pays a funeral benefit if the accident resulted in any fatalities.
Property damage liability coverage pays for repairs to the other driver’s vehicle. It also covers repairs to public property damaged or destroyed in the same incident, such as buildings, sheds, fences, fire hydrants, mail boxes, sign posts and light stands.
In tort states, a minimum level of liability coverage is required. The exact amount will vary, depending on the location. While drivers must buy at least this amount to comply with state laws, they can choose to buy a policy with a higher degree of protection if they wish.
People who have sustained personal injuries or property damage in a collision have the right to sue the at-fault driver to receive compensation. The at-fault driver’s insurance company will pay for the damages, up to the available policy limit. It will also pay for legal fees involved in defending a law suit brought by an accident victim to collect damages.