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Insurance 101

Insurance 101: Auto Insurance Liability Coverages

By January 8, 2020 No Comments

Insurance 101 is Insurance Centers’ educational designed to increase your insurance knowledge. Today’s Insurance 101 is on auto liability coverages on your car insurance policy.

Auto Liability Insurance

Auto Liability Insurance is a type of coverage that’s required by law in most states. If you cause a car accident, liability coverage helps pay for the other person’s expenses.

Auto liability coverage comes in two forms: bodily injury liability coverage and property damage liability coverage.

  • Bodily injury liability coverage (or “BI”) helps pay for medical expenses that result from an car accident you are at fault.
  • Property damage liability coverage ( of”PD”) help pay repairs to damages (such as a car) that result from an car accident you are at fault.

Liability Insurance Coverage Limits

Liability insurance coverage have limits. A limit is the amount your insurer will pay for a covered liability insurance claim. Limits very depending on what you choose when your purchase your auto insurance policy. Each state sets minimum coverage limits for bodily injury liability and property damage liability that drivers must purchase, but you can buy additional coverage. You probably see three liability coverage limits on your car insurance policy:

  • Property damage liability limit.
    This is the maximum amount your insurer would pay to repair damage you cause to another party’s property.
  • Bodily injury liability limit per person.
    This establishes a maximum payout for each individual who is injured in an accident that you cause.
  • Bodily injury liability limit per accident.
    This sets a cap on the total amount that your insurance provider will pay out for all medical expenses other people incur from a single accident you cause. It’s important to set this limit at an amount that makes you comfortable, as it may be needed to help pay for the medical expenses incurred by multiple people.

 

Most insurers package bodily injury and property damage limits together. At Insurance Centers, we recommended everyone to at least have 100/300/100  ($100,000 BI per person limit, $300,000 BI per accident limit, $100,000 property damage limit) for their insurance.