Paul Sanchez
Liability auto insurance covers damage to an individual from an accident in which you are at fault. It covers both bodily injury (BI), or physical harm, to another driver or passenger, and property damage (PD), such as vehicle or structural damage. Liability insurance is almost always required and some amount of liability insurance is required in every state except New Hampshire.
If you are in an accident and want your insurance company to pay for your damages, you will have to file a claim with them. To file a claim, you will need the following information: names of everyone involved, your insurance policy number, the other driver's insurance information, details of the accident, and a copy of the police report.
| Characteristics | Values |
|---|---|
| What you can claim | Damage to an individual from an accident in which you are at fault, bodily injury, physical harm to another driver or passenger, property damage, vehicle or structural damage, medical expenses, loss of salary due to missed work, and legal fees |
| When to claim | When you'll save money (i.e. when your out-of-pocket costs would extend past your deductible), when you caused an accident or damage to someone else's car or property, when someone has hit your car, when people were injured in an accident |
| When not to claim | When the damages are extremely minor, when you damage your own car |
What You'll Learn
Bodily injury
Nearly every state in the US sets a minimum requirement for bodily injury coverage, such as $25,000 per person, to demonstrate your financial responsibility on the road. However, consumers have the option to purchase coverage beyond the legal minimum. It is recommended to get limits that match the value of your assets or the highest limits you can afford. This is because if your insurance coverage is not enough to pay for the damage you have caused, the other driver may take you to court and sue for the remainder.
When filing a bodily injury liability claim, it is important to document and keep a record of the accident, including a detailed description of what happened, photos of the scene and any injuries, records of medical examinations and bills, and proof of lost wages.
The amount of bodily injury liability coverage you need depends on the minimum requirements in your state and your personal situation. At a minimum, you should aim to get the amount required to drive legally in your state. Some experts recommend having bodily injury limits of at least $100,000/$300,000. If your net worth exceeds the coverage limits offered by your insurer, consider buying umbrella insurance to provide additional protection.
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Property damage
This type of insurance covers the cost of repairing or replacing the other person's vehicle, including any diminished value to the car as a result of the crash. It also covers damage to buildings and other structures, such as fences and lampposts, as well as trees and other landscaping. In some cases, it may also cover lost income from a business closure caused by the accident.
The amount of property damage liability insurance you need depends on the value of the property that could be damaged in an accident. It's recommended to have at least $100,000 in property damage liability coverage to protect yourself in case of an accident that damages multiple cars or expensive property. The average property damage claim is a few thousand dollars, but the cost of repairs can be much higher if you crash into a newer or luxury vehicle.
If your property has been damaged by another driver, you can file a claim with the other person's insurance company. Be sure to exchange information at the scene of the accident, including names, insurance information, and license plate numbers. You should also take pictures of the damage and file a police report, as the insurance company may request these documents. The insurance company will then work with you to assess the damage and determine the appropriate compensation.
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Medical expenses
MedPay provides coverage regardless of who is at fault in the auto accident. It covers medical and funeral expenses if you or your passengers sustain injuries or, in the unfortunate event of a fatality, death. This includes injuries sustained while riding as a passenger in someone else's vehicle or as a pedestrian or cyclist struck by a vehicle.
In addition to MedPay, Personal Injury Protection (PIP) is another form of coverage that can help with medical expenses. PIP is required in certain states and provides broader coverage than MedPay. It covers medical expenses, lost wages, and, in some cases, psychiatric and rehabilitation costs resulting from an accident. PIP can be used regardless of fault and can provide coverage for you, your family, and your passengers.
When making a liability auto insurance claim for medical expenses, it is essential to understand the specific coverages included in your policy. The claim process typically involves gathering relevant evidence and documentation, contacting your insurance company to initiate the claim, working with a claims adjuster, and receiving a claim settlement and payout. It is advisable to file a claim as soon as possible after an accident and to carefully review your policy to understand your coverage limits and deductible.
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Loss of salary
The most obvious example is when a physical injury, like a broken leg, prevents you from doing your job. In that case, you are entitled to recover the wages you would have received had your leg not been broken, and you were still able to work. If you couldn't work for two months, then you are entitled to recover the amount you would have normally been paid during those two months.
Lost wages can also be claimed if you suffer from a psychological injury, such as PTSD, due to the accident, as long as it is severe enough to prevent you from working.
If you are left with a permanent or long-lasting disability that affects your ability to earn money for an indefinite period into the future, then you may be able to recover damages for "lost earning capacity". Even if you can still work, you can recover if the disability prevents you from having a higher-paying job than you likely would have had if not for the disability.
To prove lost wages, you will need to submit your most recent paycheck prior to the injury. If you are self-employed, you will need to submit proof of what you normally would have earned, for example, invoices from the same period during the previous year.
Lost wages can be claimed under bodily injury liability coverage, which covers only those you injured in an auto accident, including their medical expenses and other items such as their loss of earnings if they are unable to work due to their injuries.
Alternatively, you can claim lost wages under personal injury protection (PIP) coverage, which offers bodily injury reimbursement for you or your passengers in an accident, regardless of who was at fault. PIP may also cover lost wages from being unable to work.
Lost wages benefits vary by state and insurer but typically help you, your passengers, and other drivers listed on your policy if you receive accident-related injuries in a car crash and are unable to work. You may get a set weekly amount or a percentage of your actual gross wages lost due to the accident, up to the maximum limit of coverage. There is usually a certain timeframe in which to make the claim and a set period for which the payments will be paid out.
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Legal fees
Liability insurance can help cover legal fees in the event of a car accident. If you are being sued, your car insurance company should cover your legal fees and hire an attorney on your behalf. This is because liability insurance is designed to protect your personal finances, ensuring you don't have to pay out of pocket if someone takes legal action against you following a road traffic accident.
However, if you are the one suing another driver, you will typically need to pay for your own legal expenses. If you win the lawsuit, you may be able to collect these legal fees from the at-fault party.
Bodily injury liability coverage, which is a component of liability insurance, can also help to cover legal fees if the injured party files a lawsuit against the at-fault driver. This type of coverage includes medical expenses, lost wages, and other expenses incurred by the injured person.
It's important to note that there may be exceptions to your insurance company's obligation to cover your legal fees. For example, if you intentionally caused the accident or if the other driver's damages exceed your policy limits, you may need to hire your own lawyer.
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Frequently asked questions
Liability auto insurance covers damage to an individual from an accident where you are at fault. This includes bodily injury (BI) or physical harm to another driver or passenger, and property damage (PD) such as vehicle or structural damage.
Liability auto insurance is required by law in most states and can provide financial protection in the event of an accident. It can help cover the cost of repairs or replacements for a covered loss, and pay for damages or injuries you cause to others.
Liability insurance only covers damages to other individuals or property in an accident where you are at fault. Full coverage insurance includes liability insurance as well as additional coverages such as collision and comprehensive insurance, which cover damages to your own vehicle.
The process for filing a liability auto insurance claim typically involves gathering relevant evidence and documentation, contacting your insurance company, working with a claims adjuster, and receiving a claim settlement and payout. It is important to file a claim as soon as possible and provide as much information as possible to support your claim.
