Liability car insurance is a type of auto insurance
that covers the damages and injuries that you cause to other people or property
in a car accident. This type of car insurance is mandatory in most states and
countries, as it protects you from the financial and legal consequences of
being at fault in a crash.
Liability car insurance has two main components:
bodily injury liability and property damage liability. Continue reading to know
more…
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Bodily Injury Liability
Bodily injury liability covers the medical
expenses, lost wages, pain and suffering, and legal fees of the people that you
injure in a car accident.
Bodily injury liability does not cover your own
injuries or those of your passengers, for which you need personal injury
protection or medical payments coverage.
This component is usually expressed as two numbers,
such as 25/50, which means that your policy will pay up to $25,000 per person
and $50,000 per accident.
Property Damage Liability
Property damage liability covers the repair or
replacement costs of the vehicles, buildings, fences, or other property that
you damage in a car accident.
This component does not cover your own vehicle, for
which you need collision or comprehensive coverage.
Also, Property damage liability is usually
expressed as one number, such as 10, which means that your policy will pay up
to $10,000 per accident.
How Much Liability Car
Insurance Do You Need?
The amount of liability car insurance that you need
depends on several factors, such as the state or country where you live, the
value of your assets, and your risk tolerance.
Each state or country has its own minimum liability
car insurance requirements, which you must meet to drive legally.
However, these minimums may not be enough to cover
the full costs of a serious accident, especially if you injure multiple people
or damage expensive property. In that case, you may be sued for the difference
and have to pay out of your own pocket.
To protect yourself from this scenario, you may
want to buy more liability car insurance than the minimum required by law.
A common recommendation is to have at least
100/300/50 in liability car insurance, which means $100,000 per person,
$300,000 per accident in bodily injury liability, and $50,000 per accident in
property damage liability.
However, this may not be enough if you have a high
net worth or a high income, as you may be targeted by lawsuits. In that case,
you may want to buy even more liability car insurance or consider an umbrella
policy, which provides extra liability coverage beyond your auto insurance
limits.
How Much Does Liability Car Insurance Cost?
The cost of liability car insurance varies
depending on several factors, such as your age, gender, driving record, credit
score, vehicle type, location, and the amount of coverage that you choose.
According to the National Association of Insurance
Commissioners, the average annual cost of liability car insurance in the United
States was $611.12 in 2019. However, this is just an average and your actual
cost may be higher or lower depending on your personal situation.
To find the best deal on liability car insurance,
you should shop around and compare quotes from different insurers. You should
also look for discounts that you may qualify for, such as good driver, good
student, low mileage, multi-policy, or anti-theft device discounts.
You can also lower your liability car insurance
cost by raising your deductible, which is the amount that you pay out of your
own pocket before your insurance kicks in. However, you should make sure that
you can afford to pay the deductible in case of an accident.
How do I file a claim for
liability car insurance?
To file a claim for liability car insurance, you
need to follow these steps:
Call the police and report
the accident. The police will provide you with an official report that will document
the details of the crash, such as the date, time, location, parties involved,
witnesses, injuries, and damages.
This report will help you prove your liability and
support your claim. You should also exchange information with the other driver,
such as their name, address, phone number, license plate number, and insurance
information.
Collect evidence and
documentation of the accident. You should take photos or videos of the scene, the
vehicles, the property damage, and the injuries.
You should also get the names and contact
information of any witnesses who saw the accident. You should also keep copies
of any medical bills, repair estimates, receipts, or other expenses related to
the accident.
These documents will help you demonstrate the
extent of the damages and injuries that you caused and the amount of
compensation that you owe.
Contact your insurer to
file a car insurance claim. You should notify your insurance company as soon
as possible after the accident, preferably within 24 hours.
You have to provide them with the police report,
the evidence, the documentation, and the other driver’s insurance information.
You should also explain what happened and how you are liable for the accident.
You should be honest and cooperative with your
insurer, as lying or withholding information could jeopardize your claim or
result in legal consequences.
Speak with an insurance
adjuster. An insurance
adjuster is a person who works for your insurance company and evaluates your
claim.
The adjuster will review the evidence, the
documentation, the police report, and the other driver’s claim. He will also
inspect the vehicles and the property damage, interview the witnesses, and
verify the injuries.
The adjuster will then determine who is at fault
for the accident and how much your liability car insurance will cover. He may
also negotiate with the other driver’s insurer or their lawyer if they dispute
your liability or the amount of damages.
Receive your auto insurance
payout. After the
adjuster has completed the investigation and the negotiation, your insurance
company will issue a check to pay for the damages and injuries that you caused.
The check will be made out to the other driver or
their insurer, or to the owner of the property that you damaged. You will not
receive any money from your liability car insurance, as it only covers the
losses of others.
However, you will be protected from having to pay out of your own pocket, unless the damages and injuries exceed your liability car insurance limits.
