Auto/Car Insurance Coverage: Liability

Auto Insurance plans are usually packaged as liability or comprehensive coverage. It is usually simple to determine what type of coverage you will be required to have and which one will benefit you most. Your purchase insurance to protect yourself and your family in the event of losses to your person or property and you protect yourself against losses suffered by others. This article will cover Liability Coverage plans and explain them in more detail. Future articles will discuss comprehensive coverage.

Liability Coverage (BI)

Bodily Injury Liability Coverage: This type of coverage covers other individuals bodily injuries or death for which you are responsible. It will also set up a legal defense in the event that another party involved in the accident files a lawsuit against you. Claims associated with BI would be medical bills incurred as a result from the accident, loss of income during recovery, pain and suffering. In the event of a serious accident you would want enough coverage to protect you and your personal assets in the event of a judgment against you in a lawsuit. Bodily Injury only covers bodily injury to people it does not cover damage to your vehicle or others vehicles. Therefore it is often a state requirement to have the same level of coverage on each one of your vehicles. BI does not cover your personal medical bills or those on your policy when you are at fault, it only cover others injured due to your fault. In most states coverage is limited to certain bounds within each policy, so be sure to know what each policy offers in coverage limitations. Dual coverage limits refers to the maximum amounts that will be pain per person, per incident respectively. It is important to keep in mind certain factors when you select the limit of BI coverage. You want to choose a high enough limit that would cover expenses incurred from an accident. IF your limits are too low you will still be responsible to pay the remainder of the bills not covered by the insurance. This could cause you to liquidate assets etc. to reach that financial obligation and place you in a poor financial position.

Property Damage Liability (PD)

This type covers you if your car damages someone else's property, usually their car, but it also covers damage such as fences, yards or house if your car damages those in an accident. It will also provide you with legal defense if another party files a lawsuit against you. It is wise to purchase enough of this insurance to cover the damage your car might do to another persons property, usually another vehicle. Coverage will be limited to the terms and conditions of the individual policy. Coverage limits refer to the maximum amount that will be paid per accident. As with BI you want to select an amount of coverage that would cover the damage your car might do to another vehicle or object. If the amount is too low then you will still be responsible to pay the remaining amount.

Posted in: AutoCar,Coverage,Insurance,Liability