Auto liability insurance is a crucial part of a car insurance policy, and it’s one of the main types of insurance that states require — but provides the most limited coverage. In this guide, you will learn about auto liability insurance policy, what it covers, and answer all other essential questions.
What Is Liability Insurance?
Auto liability insurance coverage helps cover the other party’s bodily injury or property damage costs if you’re at fault in an accident. Drivers are required by law to buy a minimum amount of auto liability coverage, which will depend on your vehicle value, your financial situation, and where you live.
Do Drivers Need Auto Liability Coverage?
If you do not want to pay out-of-pocket for people’s injuries and you don’t want to risk incurring unnecessary bills that will affect you for a long time, then you need auto liability coverage.
What Does Auto Liability Coverage Cover?
Auto liability insurance has two types of coverage:
Property Damage Liability Coverage
This coverage pays for the damage or loss you cause another person’s property, and you were found legally accountable for those damages. The type of bills property damage liability pays for includes but are not limited to:
- Repairs for the other person’s vehicle.
- Reconstruction structures such as buildings and fences.
- Repairs or replacement of items damaged inside the car.
- Income that was lost as a result of property damage.
Bodily Injury Liability Coverage
Cover the cost of injuries for which you are legally liable. The type of bills bodily Injury liability pay for include but are not limited to:
- Medical bills, both short- and long-term
- Lost wages from work missed
- Pain and suffering
- Funeral costs
- Related legal fees for both insured and the other party