Liability pays out when you hit someone or something with your vehicle. It can help cover an injured person’s medical bills, repairs to someone’s vehicle or fix damage to property. Drivers in most states are legally required to carry some form of liability insurance.
Minimum car insurance requirements vary from state to state. But state requirements are generally modest—typically $20,000 to $30,000 for bodily injury suffered by one person in an accident, $50,000 for all people hurt in the same accident, and up to $25,000 for property damage resulting from that accident. A state’s required minimum merely keeps you in compliance with state law. Most drivers need more than the minimum to avoid paying out of pocket to make up the difference between the damages and your coverage.
There are two types of liability coverage: bodily injury and property damage. In some states, a third type of liability coverage called uninsured/underinsured motorist coverage is also required.
Bodily injury liability coverage helps pay the costs for anyone that is injured in a car accident where you’re found liable. This may include a driver or passengers in another car, pedestrians or unrelated passengers in your own car. It covers medical expenses, compensation for lost wages and income and legal fees.
For instance, you run a red light, strike another car and injure the driver. Your liability coverage obliges the company to defend you—in court, if necessary—and pay claims to the other driver for vehicle damage and bodily injuries, including medical and hospital costs, rehabilitation, nursing care, and possibly lost income and money for pain and suffering.
Property damage liability coverage helps pay for damage you cause to another person’s vehicle or property. If you hit someone else’s car, front porch or mailbox with your car, property damage liability coverage may help pay to repair their property.
Uninsured/underinsured motorist insurance is required in fewer states, but it’s in your and your passengers’ best interests to think seriously about buying this coverage. Unlike liability insurance, this coverage can help pay your expenses.
It covers your injuries, your passengers’ injuries, and damage to your vehicle if you’re hit by a driver who doesn’t have enough or has no auto insurance coverage. It may also cover hit-and-run accidents.
So, if a driver hits your vehicle and flees, you can file a claim against your policy’s uninsured motorist coverage.
