What does liability car insurance cover?

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If you are in the market for car insurance, you will need to understand the types of coverage. Liability insurance coverage is the basic form of coverage and is required by law in 48 states and the District of Columbia.

Basics

Liability car insurance pays for the medical expenses or damaged property of another person if your car is involved in an automobile accident and the person driving your car is at fault.

Types

There are two types of liability car insurance, bodily injury liability and property damage liability.

Bodily Injury Liability

Bodily injury liability insurance pays for the medical expenses of another person, or persons, if someone is driving your car and causes an automobile accident that includes injuries. The bodily injury liability policy will also pay for lost wages and pain and suffering of the injured person or persons.

Property Damage Liability

Property damage liability insurance pays for the damaged property of another person if someone is driving your car and causes an accident. In most cases, the damage is to another automobile, but other property can also be damaged and will be covered by a property damage liability policy.

Additional Policy

Another type of liability policy that applies to automobile accidents is the personal umbrella liability policy. This policy will work like a supplemental insurance policy and will pay amounts that you might be liable for that are over what your auto liability policy will pay.

Source:

Insurance Information Institute: What is Covered by a Basic Auto Policy?

National Association of Insurance Commissioners: What is Auto Insurance?

Resource:

Insurance Information Institute

National Association of Insurance Commissioners

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What does liability car insurance cover?

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