Auto Insurance: Liability To Self

Liability car insurance is a type of insurance coverage that is mandatory in most states. It protects you financially if you are responsible for someone else's injuries or property damage in a covered accident. Liability insurance does not cover damage to your own vehicle or your own injuries, but it can help protect you from being sued by covering the other party's losses.

Liability insurance is typically divided into two categories: bodily injury liability and property damage liability. Bodily injury liability covers the medical costs of the other party, including emergency care, ongoing medical expenses, and lost wages. Property damage liability covers the cost of repairing or replacing the other party's property, such as their vehicle, buildings, fences, or other structures.

The cost of liability insurance varies depending on factors such as age, gender, driving history, and the state you live in. It is important to note that state minimum coverage may not be sufficient in the event of a major accident, and additional coverage may be necessary to protect yourself from financial strain.

Bodily injury liability coverage

BI coverage is a standard component of your auto insurance policy, designed to protect you financially if you're at fault for an accident. It helps cover the costs associated with injuries sustained by others in the accident, including emergency care, ongoing medical expenses, and legal fees if you're sued for damages. This type of coverage is required by most states and is included in the majority of car insurance policies. However, it's always a good idea to verify that it's part of your policy.

Understanding Bodily Injury Liability Limits

BI limits are typically presented in a format like "100/300," where the first number represents the per-person limit, and the second number denotes the per-accident limit. For instance, a policy with BI limits of $100k/$300k means that the insurance will pay up to $100,000 for medical expenses per person, with a maximum of $300,000 total for all injured individuals in a single accident.

The amount of BI coverage you require depends on your state's minimum requirements and your personal circumstances. Most states mandate a minimum level of BI coverage to register your vehicle. However, it's important to note that these state-set limits may not be sufficient for your needs. When shopping for insurance, consider your potential risks and financial situation to ensure you have adequate protection.

Cost of Bodily Injury Liability Insurance

In states where BI coverage is mandatory, it is usually included in the overall price of your auto insurance policy. However, if you opt for higher coverage limits to enhance your protection, your premium will likely increase accordingly.

Additional Considerations

While BI coverage is crucial, it's important to remember that it only covers injuries to others and not yourself. To ensure you're fully protected, consider adding other types of coverage to your policy, such as personal injury protection or medical payments coverage for your own medical expenses, and collision coverage for repairs to your vehicle.

Property damage liability coverage

In most states, drivers are legally required to carry property damage liability coverage as part of their auto insurance policy. This coverage is designed to protect you from financial strain in the event of an accident. For example, if you crash your car into someone else's property, you could be sued for the damages. Property damage liability coverage would help cover the expenses, potentially saving you from significant out-of-pocket costs.

It is important to note that property damage liability coverage typically applies only to damage caused to other people's property and not to your own. Additionally, the coverage is limited to the amount specified in your policy, and you may be responsible for any costs that exceed your coverage limit. As such, it is recommended to carefully consider your financial situation and choose a coverage limit that aligns with your needs and provides adequate protection.

When determining how much property damage liability coverage you need, consider factors such as whether you own a home or other valuable items, the areas you typically drive in, and the presence of expensive vehicles in your area. Additionally, each state sets its own minimum coverage requirements, so be sure to review the specific requirements for your state.

Collision coverage

• Single-vehicle accidents, such as hitting a guardrail or telephone pole.
• Collisions with other vehicles.
• Collisions while your vehicle is parked (including hit-and-runs).
• Accidents involving road hazards, such as potholes.

It is important to note that collision coverage does not apply to accidents involving animals or damage caused by events outside your control, such as a fallen tree. These types of incidents would typically be covered under comprehensive coverage.

The cost of collision coverage varies depending on personal factors such as age, gender, marital status, driving record, vehicle type, and location. On average, collision coverage costs around $345 per year, but this can range from less than $200 to over $500. Collision coverage typically has a deductible, which means you will need to pay a portion of the repair or replacement costs out of pocket, usually between $500 and $1,500.

When deciding whether to purchase collision coverage, consider the value of your vehicle, your ability to pay for repairs or a replacement out of pocket, and whether your vehicle will be in storage for an extended period. Collision coverage can provide peace of mind and protect you from financial strain in the event of an accident.

Comprehensive coverage

The cost of comprehensive coverage will depend on factors such as your age, driving history, vehicle type, and location. It is generally recommended to have enough coverage to protect your net worth and financial assets in case of an accident.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage comes into effect when you are hit by a driver with no auto insurance. On the other hand, underinsured motorist coverage protects you if the other driver doesn't have enough insurance to cover the damages or injuries they caused. These coverages are usually offered together, and they can provide valuable peace of mind in the event of a hit-and-run accident, as you can file a claim against your uninsured motorist coverage.

In some states, such as Illinois, both uninsured and underinsured motorist coverages are required. Other states, like Massachusetts and South Carolina, mandate only uninsured motorist coverage. However, even if your state doesn't require it, driving without this coverage leaves you vulnerable to significant financial risk. According to the Insurance Information Institute, nearly 13% of drivers nationwide don't have auto insurance, and in certain states, this number exceeds 20%.

• Uninsured motorist bodily injury (UMBI): Covers medical bills for you and your passengers if you're hit by an uninsured driver.
• Uninsured motorist property damage (UMPD): Covers damage to your vehicle caused by an uninsured driver.
• Underinsured motorist bodily injury (UIMBI): Covers medical bills for you and your passengers if you're hit by a driver with insufficient insurance.
• Underinsured motorist property damage (UIMPD): Covers damage to your vehicle caused by a driver with insufficient insurance.

It's important to note that some states may require a deductible for UMPD/UIMPD, but UMBI/UIMBI generally doesn't include a deductible. Additionally, while UMPD covers damage to your vehicle, collision coverage is necessary to cover damages to your car in a hit-and-run incident in certain states.

When determining how much uninsured/underinsured motorist coverage you need, consider matching the amount of your liability coverage. For UMPD, you can select a limit that aligns with the value of your vehicle. For instance, if your car is worth $20,000 and you don't have collision coverage, consider opting for $20,000 in UMPD coverage.

Frequently asked questions