Liability Coverage

Liability coverage is among the most important in relation to your financial security. In the face of ever-increasing medical costs, the possibility of a multiple car accident, or damage to expensive property, the minimum coverage limits required by law may not be enough. Choosing low liability limits could be a risky way to save on insurance.

Bodily Injury Liability

This coverage, combined with property damage liability coverage, is the foundation of any auto insurance policy and is required in most states. If bodily injury claims or lawsuits are brought against you and if an investigation or a court finds you to be legally responsible for injuries to persons, your bodily injury liability insurance will pay, up to your policy limit, for injuries to other people, such as pedestrians, passengers in your car, or people in other vehicles. Also, bodily injury liability coverage provides for your legal defense against those bodily injury claims or lawsuits, should it become necessary.

Although it varies by state, bodily injury coverage does not generally pay for your own injuries or to your spouse or other family members, especially when they are not in your covered vehicle. Injuries to you, your spouse, and other family members in your vehicle can be protected more completely by medical payments coverage.

There are different limits for bodily injury liability coverage to accommodate various levels of protection. If you are found to be responsible for a serious accident with injuries to several people, in your car or in other cars, or if there is even one serious injury or death, your state’s minimum insurance may not cover you adequately. An objective in selecting limits of any liability coverage should be to purchase coverage equal to the net asset value that you have available and could reasonably lose in the event of causing damages to others. It is a good idea to consider and purchase higher limits than what your state requires.

Property Damage Liability

This coverage, combined with bodily injury liability coverage, is the foundation of any auto insurance policy and is required in most states. If property damage claims or lawsuits are brought against you and if an investigation or a court finds you to be legally responsible for damages to property, your property damage liability insurance will pay, up to your policy limit, for repair or replacement of things such as someone else’s car, light posts, or even buildings. Also, property damage liability coverage provides for your legal defense against those property damage claims or lawsuits, should it become necessary. Property damage coverage does not pay for the damage to your own property; damages to your property are covered under the optional collision and comprehensive coverage.

There are different limits of property damage liability insurance to accommodate various levels of protection. If you are found to be responsible for a serious accident with damages to several vehicles, or even one expensive vehicle, your states minimum insurance may not cover you adequately. An objective in selecting limits of any liability coverage should be to purchase coverage equal to the net asset value that you have available and could reasonably lose in the event of causing damages to others. It is a good idea to consider and purchase higher limits than what your state requires.

Each state’s Financial Responsibility Law requires minimum property damage liability limits.

Medical Payments

This optional coverage pays, up to the policy limit per person, for medical expenses (regardless of fault) for you and the occupants of your covered vehicle who are injured in an automobile accident. It also protects you and the relatives living in your household if they are injured in someone else’s car or if injured by a car when they are pedestrians. All reasonable and necessary medical expenses are covered within the period of time specified in your policy. This coverage is valuable if you do not have health insurance, because payment will be made while the liability is being determined.

Excess Medical Payments Coverage

This optional coverage is different from medical payments coverage in that it covers only those reasonable and necessary medical expenses, up to the policy limit, which are not covered by another source, such as health insurance or another person’s auto insurance (except Medicare). This coverage pays up to the policy limit per person for medical expenses as outlined above, regardless of fault, if you or the occupants of your covered vehicle are injured. This coverage also protects you and the relatives living in your household if injured in someone else’s car or injured by a car when they are pedestrians--under the same coverage conditions.

This coverage is designed to complement your health insurance, as most medical insurance policies carry co-insurance and/or deductible provisions, and is less expensive than standard medical payments coverage.