Auto Liability Insurance - The Basics
Auto liability insurance is a critical type of insurance coverage. So much so that it is required by law in most American states. But what is liability insurance? Liability insurance is a type of insurance that covers drivers for the cost of damages and/or injuries caused to others during a motor vehicle accident when you are at fault.
Auto liability insurance consists of two separate and different policies namely bodily injury liability and property damage liability coverage. Bodily injury liability covers a driver for the costs of causing personal injury to others while property damage liability coverage covers the driver against damages caused to the physical property of others.
The bodily injury coverage portion of your auto liability insurance policy will help you to cover an injured person's medical expenses and lost income if an accident was your fault. It will also help you to cover any legal fees in the event of a lawsuit. How much you are covered for depends on what you choose in terms of the limits of the policy.
The property damage coverage portion of your auto liability insurance policy helps foot the bill for damages to another person's property if you are the cause of an accident. It will also help pay for legal fees if you are involved in a lawsuit. How much you are covered for depends on what you choose in terms of the limits of the policy.
Auto insurance policies are described by three numbers for example: 50/100/25). These numbers refer to auto liability insurance and are generally referred to as the split limits of auto insurance. In the above example of an auto liability insurance policy, cover translates into $50,000 cover in terms of bodily injury caused to another person, $100,000 for bodily injuries caused to all parties involved and $25,000 damages to physical.
Depending on the state where you live different levels of auto liability insurance will be required. Doing some research will help you to uncover your exact legal requirements. A word of warning, however! It may seem like a good idea to try to save money by choosing the minimum level of coverage specified by your state. This will satisfy the legal requirements but may not provide adequate protection for you in the event of a serious accident.
