What is Auto Liability Insurance?
Auto Insurance Liability is an issue that is vital to understand in order to assess the amount of coverage you require from your policy. The article will provide you with a basic understanding of the subject matter.
Liability Insurance Coverage can be included in a policy to provide cover for bodily injury or property damage caused by the policy holder in an auto accident. Liability protection will pay for the medical costs and repair costs involved.
Bodily Injury (BI) Coverage is also important. If you cause someone an injury through an auto accident that is your fault, your liability insurance will pay for the medical costs involved. A policy will often have split limits in a form such as 30/60/20. This separates the total available to cover injuries for one person from the total amount available to cover the whole incident. In this example, $30,000 is available to cover bodily injury per person, with a maximum of $60,000 overall. The '20' relates to property damage, which will be detailed shortly. Some insurance policies have a combined single limit only.
Property Damage Insurance is also required in case you damage another person's property in an accident. This can also include the car of the other driver, as well as stationary objects such as road signs etc. In a split-limit policy the third listed number (in our example 20) applies. Combined policies again list a single amount to cover both bodily and property damage.
Minimum liability insurance coverage levels are required in some states, but it is often recommended to have higher levels of coverage. There is no way of forecasting an accident, or the amount of property damage and personal injury that can be caused, so it is always best to err on the side of caution. People are always tempted to reduce their liability limits in order to save money on their insurance policy, but do not do something you may regret in the future just for the sake of saving a few dollars a month.
The lower your insurance liability limit is, the lower the cost of your premium will be, so the best idea is to work out what you will be able to pay out of your pocket in the unfortunate event of an accident. If you have little money in your account then you will be taking an unnecessary risk if you reduce your limits of liability.