Auto insurance policies have many components and each provide different protection for policyholders. You need to have the relevant coverage in order to make a claim for a particular loss. Believe it or not there are many policyholders who buy liability only car insurance coverage and expect that they can claim for damages their vehicles sustained in collisions. That is why it is worth having a look at what does liability car insurance cover.
What Is Liability Coverage for Auto Insurance
Liability Coverage, as the name suggest, only pays for injuries and damages which the policyholder is liable for. In other words, it pays for injuries and damages suffered by third parties as a result of an accident or incident which was caused by the policyholder. In this case, the policyholder is the first party, the insurance company is the second party and the other people who can claim compensation from the policy because of damages and/or injury caused by the policyholder is third party.
Liability Auto insurance policies don’t pay policyholders’ own loses. Yet it is one of the most important coverage they could buy. When they cause an accident there may be other people who are injured and sustained damages to their cars. Since it is their fault they are responsible for paying for such losses. These could be medical expenses for third party bodily injuries and/or property damages to repair third party cars or pay for other damages caused to buildings and possessions.
Third parties are not simply going to go away if you don’t have insurance. They will want to make you pay for their losses. They will take you to court and demand payment. If you have liabilities insurance but not sufficient to pay for all the damages caused, third parties can collect the maximum amount from your insurer and still sue you for whatever is left. That is why it is important to check what does auto insurance cover? And make sure that you are happy with the coverage.
How Does Liability Car Insurance Work?
Every state in America has own insurance regulations and each one of them require minimum car insurance before anyone can drive a vehicle. These laws are there to protect and compensate innocent bystanders for the damages they sustained in a vehicle accident. Usually, limits of such coverage is very low since they are there to provide minimum acceptable cover. In addition, states keep these minimum limits low to make sure that premiums for the basic liability car insurance policies remain low in order to allow everyone to afford it.
As explained above, you are not off the hook for the damages you caused as a result of vehicular accident just because you bought minimum state required liability auto insurance coverage. Therefore, it is still your responsibility to make sure that you have made enough provisions for possible damages you may cause while driving a vehicle.
If you want damages to your own automobile paid you should buy full coverage auto insurance policy that include collision and comprehensive as well as uninsured motorist coverage. Furthermore, you’d better buy a lot larger coverage than basic liability cover required by your state.
In conclusion, you should buy at least ten times more liability coverage and collision and comprehensive coverage if you want to make sure proper insurance protection. A standard full coverage policies sold commonly today comes with good level of liability coverage and they are designed to be reasonably cheap. You should check the policy schedule before agreeing to purchase it. In fact, you should decide what level of coverage you want before looking for prices.