What You Need to Know About Auto Liability in the Event of an Accident

January 08, 2020

What You Need to Know About Auto Liability in the Event of an Accident

What Does Liability Insurance Cover?

Bodily injury liability and property damage liability coverages provide compensation for injuries to others, related legal expenses and damage your vehicle does to another person's property if you cause an accident.

What Is Bodily Injury Liability Coverage?

Your bodily injury liability covers the costs associated with the covered injuries you may have caused to other people in that accident, and also provides for a legal defense if you're sued. Bodily injury liability covers injury to people, up to the policy limits.

What is Property Damage Liability Coverage?

If you're in an accident in which you're at fault, your property damage liability pays for the covered damage you've caused to the other car and provides you with legal defense if the other party files a lawsuit against you. You should have enough property liability insurance to cover the amount of damage your car might do to another vehicle or an object such as a building or piece of equipment.

Liability coverage is the most important protection a driver can have. If you are found legally responsible for damages resulting from an accident, this coverage may pay up to the limit you select.

Choose your limits wisely, as you will be personally responsible to cover any costs above the limit. If more coverage is needed to protect your personal assets, consider an umbrella policy.

Covered expenses for anyone injured in an accident — including passengers in your car, passengers in another car and pedestrians — can include:

  • Hospital and medical bills
  • Lost wages
  • Pain and suffering
  • Rehabilitation services
  • In-home health care services
  • Legal fees
  • Bail bonds
  • Court costs

Each state has different required minimum limits of liability they expect an individual to carry. For the state of California it is $15,000 per person/$30,000 per occurrence for bodily injury and $5,000 for property damage. For the state of Washington the limits required are $25,000 per person/$50,000 per occurrence and $10,000 for property damage. If you speak to your agent or look at your local department of motor vehicles website you should be able to find out your specific states liability minimums.

Let's Look At A Possible Real Life Scenario

Let's say that three cars are in an accident and you are found to be at fault. If you have minimum limits of $15,000 person/$30,000 per occurrence and $5,000 for property damage you could find yourself vulnerable to having to pay out of pocket or a lawsuit. One of the vehicles has $5,000 worth of damage and the second vehicle has $10,000. You only have $5,000 worth of coverage that your insurance will pay so you are responsible to come out of pocket for the additional $10,000. That is just to cover the damage property of the other individuals involved. For the injuries the other two drivers and/or their passengers may have you have coverage for $30,000. Now imagine one car had 3 people who sustained injuries (including mental stress, after accident care or hospital bills) of $10,000 a piece. You would already be through your per occurrence amount of $30,000 and have no insurance coverage for anyone in the second vehicle. Again leaving yourself open for a lawsuit to obtain the funds required to pay the injured party's bills.

We understand the need to keep expenses low and that paying for insurance is not always high on the priority list. However, we do recommend you consult your insurance agent to make sure you have high enough limits to protect yourself, your family and your assets. In the event you are at fault in an accident or in an accident with an underinsured driver you will see the value in having increased coverage.