Liability insurance, which is required in the majority of states, consists of Bodily Injury and Property Damage insurance options which are combined. Liability means that you bear the blame for a particular damage that occurs to another person. Some examples of this would be if you were to cause an accident or collision.
What is Bodily Injury Liability Coverage?
If you were to strike a pedestrian or injure a person in another car that is struck by your vehicle, Bodily Injury Insurance would be the coverage type involved. It is wise to go above minimum requirements. The cost associated with paying medical bills has risen much quicker than the price of car insurance, thus having minimum coverage could leave you personally responsible for paying large sums of money from your own personal funds.
What is Property Damage Liability Coverage?
Property Damage Insurance is very similar to Bodily Injury Insurance. Property Damage Insurance repairs or replaces the other person’s property that you have damaged in the course of an accident. As surprising as this may sound, the minimum Property Damage Liability coverage required by the majority of states is not enough to pay for the replacement of a new automobile, if you are unfortunate enough to be responsible for totaling a someone’s new car. A good rule to remember is to be sure that your Property Liability coverage is, at minimum equal to the average price of a new vehicle.
Do I Still Need Personal Injury Protection?
Personal Injury Protection, also known as PIP insurance, provides coverage for your injuries in an accident for which you are at fault. This is not a standard portion of regular liability insurance. In most cases it must be purchased as a rider or add-on to your automobile insurance policy. If you do not have PIP insurance coverage, you may end up injured, out of work and facing mounting medical bills. It really pays off to have PIP coverage, as it may prevent a relatively minor accident from causing complete financial ruin for your family.
What About Uninsured Motorist Coverage?
If a person who does not have sufficient, or any, Liability coverage, then Uninsured/Under-insured Motorist coverage would pay for injuries or damages suffered by you or your passengers and any damage to your property. This coverage is not a standard part of the average liability policy, but some laws require it. Even if your state does not require this type of insurance it is a good idea for anyone that drives an automobile to have it.