Liability insurance

Auto insurance policies can be perplexing to most of the people as there are a number of insurance companies offering different types of insurance coverage with different policies. Liability insurance is mandatory in most states. Known sometimes as compulsory insurance, it protects the public from any expenses which may be occurred due to injuries or property damage caused from a car accident.

Liability insurance is considered as the least coverage an individual can take. The minimum liability insurance differs from one state to another. Liability insurance is regarded as an important one it will cover up to its stated amount if any accident has occurred causing harm to some other’s body or property, and the person operating the insured vehicle was found to be liable for the accident. The auto insurance company will pay the stated amount to the injured according to your insurance policy. But remember if you are injured or hurt in the accident, you will not get any coverage and will have to spend all the money for medical expenses as well as any damage happened to your vehicle yourself. In most cases after any claim, auto insurance companies usually increase your monthly payments if you are found liable for the accident.

In addition to personal injury insurance, most states require you to carry property damage policies so as to replace or repair any damage caused by your vehicle. In this case also the amount differs from state to state.

There are various good reasons for taking more than the minimum amount of liability insurance. This is because if the damages incurred will exceed your insurance coverage you will be liable to pay the exceeded amount from your pocket. Any excess amount than the stated amount will not be paid by the insurance company. There are some loop holes as well.

  • You are not covered for a fire or theft that is not related to a car accident.
  • You will not recover the complete amount of the cost to repair any damage of your vehicle caused by any uninsured vehicle.
  • If you are found liable for the accident, you will not get any insurance cover for your injuries or damages.
  • Even if you are not at fault, there is no insurance cover for any additional expenses caused to your car accident such as towing.

Most insurance specialist recommends taking a greater amount of insurance and coverage than what is strictly required by your state. Mostly referred as ‘comprehensive’ coverage, this includes:

Personal Injury Protection – this will cover any medical expenses and reasonable work and living expenses for any lost job time owing to an accident. In this the insurance company will not check whether the accident was caused by your fault or not.

Travel, towing and glass replacement – which may happen from any other cause rather than an auto accident.

Generally, if you have taken a loan to buy your vehicle, your bank will require you to take a comprehensive insurance on your vehicle until the loan amount is paid off.