It is good to purchase car insurance, but it is better to have liability car insurance. A good car insurance policy consists of several types of coverage, but liability insurance is the root. Without liability car insurance, you are doing yourself more harm than good because if your car insurance cannot cover all the bills you caused, you will be left stranded.
The most important part of every car insurance policy is liability insurance. It pays for the costs of the other driver’s property and bodily injuries if you were involved in an accident that you caused. When you purchase liability insurance, your insurer will pay for property damage and injuries up to the covered limit. Aside from this, the insurance also protects you financially if you are slammed in a lawsuit.
What is Liability Car Insurance?
Liability insurance is the ultimate when it comes to car insurance. It covers you when you are in a car accident that results in property damage or bodily injury to others. Additionally, it also pays for all legal costs if you are sued because of a car accident. It covers costs like legal defense, judgments, and settlements that arise as a result of a lawsuit.
Who Needs Liability Insurance?
You need liability auto insurance if you are a driver in the United States. For people who live in states that allow them to opt out of liability coverage or states that don’t have any minimum coverage requirements, they will still need liability insurance if they finance their vehicle.
How much Does Liability Insurance Cost?
Certain factors determine the cost of liability insurance. These factors include
- How much coverage do you purchase?
- The higher your coverage limit
- The more you will likely pay for liability insurance,
However, if you contact your insurer, he or she will tell you how much coverage will cost if you adjust your limit. But drivers pay an average of $635 per year, or about $53 a month, for minimum auto liability insurance. If you are going for full coverage car insurance, it is a bit pricey. However, you might be required to pay an average of $1,730 per year, or about $144 per month for full coverage.
Factors that Affect the Cost of Liability Car Insurance
Some factors determine the cost of this insurance, and they are listed below.
- Marital status
- Credit history
- Gender on a driver’s license
- Driving record
- Your age
- Location
- Vehicle type and age
All of these will determine the amount you will pay for a quote from an insurance agent or an insurer’s online quote tool.
Types of Liability Car Insurance
Liability car insurance comes in different types, and they are listed below.
Professional liability insurance (errors and omissions insurance)
This is a type of insurance policy that covers costs as a result of lawsuits for professional errors. This includes being sued for giving bad professional advice to people.
Commercial Auto Insurance
This auto insurance is meant for company vehicles. It offers additional liability coverage for business vehicles like vehicles or trucks.
Business Owners Policy (BOP)
This has similarities to a commercial auto insurance policy. But the only difference is that it offers additional property protections. It also helps to cover expenses caused by business interruptions, on-property injury costs, and store merchandise or equipment.
What Coverage Does Liability Car Insurance Offer?
Liability auto insurance offers two main coverages.
Property Damage Liability Insurance
This covers costs to repair or replace the property of others that was damaged in an accident by the policyholder. For instance, if your car was involved in an accident and damaged the property of another person, this coverage will cover all the costs to repair or replace the property.
Bodily injury liability insurance
In a situation where your car causes injury to another driver, passenger, or pedestrian, this coverage will cover all medical expenses and lost wages.
What Does Liability Car Insurance Not Cover?
Just as there are coverages that liability insurance offers, there are also other coverages that it does not offer. Let us take a look at the coverage that this insurance does not offer.
- It does not cover personal injury protection or medical payments.
- It doesn’t cover uninsured and underinsured motorist coverage.
- Comprehensive insurance
- It also does not offer collision insurance.
Always remember that liability car insurance only covers others when you cause an accident. However, it will never cover lost wages or medical bills for you or your passengers. Also, it will not cover the cost of repairing or replacing your vehicle if it gets damaged, lost, or stolen.
How do I buy Liability Car Insurance?
If you want to purchase liability auto insurance, you can do so from any auto insurer. You can shop online for coverage or with an agent. Note: You can decide to buy the minimum amount of liability insurance in your state or you can go for more coverage.
FAQs
Do I need Auto Liability Insurance Coverage?
Yes, you do. It is mandatory in almost every state. However, each state has its minimum coverage requirements. You can check out your state’s requirements before proceeding to purchase.
What is the Difference Between Liability and Full-Coverage Car Insurance?
The difference between both of them is that one pays for others’ injuries and property damage if you cause an accident, while the other includes liability, collision, and comprehensive insurance.
Does Auto Liability Insurance Cover Damages Caused by Others to My Car?
No, it doesn’t. If someone else mistakenly hits your car by accident and damages it, their liability insurance will cover the cost of your repairs. But if they don’t have insurance, your repairs will be covered by your collision coverage or uninsured motorist coverage.