If you’re found at fault in an accident, auto liability insurance helps cover the costs of the other driver’s property and bodily injuries.
The definition of auto liability coverage may appear straightforward, but consider the following scenario: you’re at a four-way stop a few blocks from your home. You’ve driven this route hundreds of times and don’t realise it’s the other car’s turn to drive until it’s too late. You’ve smashed into another driver’s car in the middle of the intersection the next thing you know. To determine who is at responsibility, your insurance company will liaise with the other driver’s insurance company (if you live in a no-fault state). If you have liability insurance, your insurer will cover the costs of the driver’s damaged automobile up to your coverage level, minus your deductible.
What is covered by motor liability insurance?
There are two forms of liability insurance for automobiles:
If you are determined to be at fault in an accident, bodily injury liability coverage applies to the other party’s medical expenditures. It may also reimburse lost wages and/or legal fees if the injured party files a lawsuit in specific cases.
Damages to property caused by a covered accident in which you are at fault are covered by property damage liability coverage. It could cover the costs of repairing or replacing the other party’s vehicle, as well as other property that was damaged in the accident, such as fences, structures, phone poles, and other types of property.
Depending on the state you live in, the minimum liability limitations for each of these coverage categories differ. Liability coverage will not cover the costs of vehicle damage or personal injury. You’ll need comprehensive and/or collision coverage for this.
Is it necessary for me to have motor liability insurance?
Yes. In many states, a certain amount of liability insurance is required – this is referred to as “minimum coverage.” While the types and quantities of coverage vary by state, all states need property damage liability (PDL) and bodily injury (BI) coverage. Personal injury protection insurance, uninsured or underinsured motorist protection, and/or property protection are all required in some states. Depending on your circumstances, you can choose a higher amount than the state’s minimal requirement.
Consider liability insurance to be the most basic form of auto insurance. Collision and comprehensive coverage, as well as other optional coverages like medical payments and personal injury protection, are not available unless you have sufficient liability insurance.