Property Damage Liability & Bodily Injury Liability Coverage Policy

Auto Liability Insurance Policy – Liability Coverage

Liability insurance covers you when you are legally responsible for an accident. It pays for expenses to the other party in the accident including bodily injury liability coverage and property damage. Bodily injury liability coverage pays for the other party’s expenses and damages in the event that the other person is injured or killed. Expenses it covers include medical expenses, funeral expenses, legal expenses and fees, pain and suffering, and lost wages. Bodily injury liability coverage does not pay for your own medical expenses. Your medical expenses are covered under the medical payments coverage or underinsured motorist coverage. The other type of liability insurance, property damage liability coverage, takes effect when you are legally responsible for an accident. It pays for other party’s property damages including repair to cars, buildings, road signs, fences, telephone poles, and other objects. Damages to your car are covered under your comprehensive and collision coverage of you auto insurance policy.

Almost all states require a minimum limit of liability insurance for registered drivers. The auto insurance company will only pay up to a certain limit for each accident. If the judgment against you is higher, you will be required to pay out of pocket the difference not paid by your insurer. The Insurance Information Institute recommends that you buy at least $100,000 of bodily injury protection per person and $300,000 per accident to protect yourself financially. You may also consider an umbrella policy which covers you when the underlying policy is exhausted.

Liability amounts are usually written as three numbers separated by slashes.

First number:
bodily injury liability maximum for one person’s injuries.

Second number:
bodily injury liability maximum for all injuries in one accident

Third number:

property damage liability maximum for one accident.