When I got my kids a dog, I had no idea that it could affect my homeowners insurance. I happened to run into my insurance agent in the store when I was buying dog food and he asked me what kind of dog we had. When I told him, he said I should stop in the office the next day. I had no idea that things like this could affect premiums, so I started asking what else could do it as well. I created this site to help others understand some of the finer points of homeowners insurance and what they should think about to manage their rates.
Even a safe driver can have an accident on the road, which is why there is auto insurance to protect you from paying for damages that you cause. However, there are many types of auto insurance you can get to protect you in different situations. Here is what you should know about liability insurance coverage.
Liability Coverage Is Typically Required To Drive
It is important to understand your state's laws regarding liability insurance and how much you must have to be allowed to drive. Every state is going to be different, with a couple of states that don't even require car insurance. However, drivers in those states must prove that they have the financial means to pay for damages they cause if they decide not to drive with insurance.
Liability Coverage Is Available In Two Categories
There will be two forms of liability insurance to purchase, with the most important being bodily injury coverage. This protects a driver from having to pay for their own medical bills when they are not at fault for causing an accident. It can also cover expenses related to pain and suffering, which are not directly tied to medical costs.
There is also property liability insurance coverage, which is designed to pay for all the other damage that was caused. This includes the other person's vehicle, buildings that may have been hit, fences that are destroyed, and even personal property within another person's vehicle.
Liability Coverage Is Broken Down With Three Coverage Amounts
You'll typically see liability coverage described with three numbers, even though there are two categories. For example, you may see a policy for 50/100/75 liability coverage, and be confused about what those numbers mean and need them explained to you.
All numbers are describing the coverage amount in thousands of dollars. The first number is the amount of bodily injury coverage per person, with the example above would be $50,000 worth of coverage. The second number is the total amount of bodily injury coverage provided per accident. The third number is for property liability coverage.
The most confusing part is likely the difference in coverage per person and per accident. If you were to cause an accident with another car that had three passengers in it, and each passenger had $40,000 worth of medical bills, each person would be under the limit of $50,000 per person. However, the total medical bills would be $120,000, which is over the $100,000 limit. You would then be liable for potentially up to $20,000 of medical bills, unless you increased your liability coverage to more than $120,000 per accident.
Share24 October 2022
