September 22, 2017

Liability Coverage Auto Insurance Explained

Liability insurance coverage comes in two forms:  Bodily Injury Liability and Property Damage Liability.  Each of these forms of liability coverage has its own special characteristics.  At the same time, they both prevent you from becoming financially drained if you are involved in an accident that is your fault because they cover the expenses of the other party.

Bodily Injury Liability is the portion of your policy that covers the bodily injuries or death expenses of a person if you cause the accident to occur.  Bodily Injury Liability can cover expenses such as medical bills, pain and suffering expenses, and loss of income.  Your Bodily Injury Liability policy should provide a benefit pay out that will cover you if you should be taken to court because of an accident that is your fault.  Keep in mind that Bodily Injury Liability does not cover your medical expenses or the medical expenses of anyone else on your policy.

Unlike Bodily Injury Liability, Property Damage Liability covers the expenses that may occur if your vehicle damages another person’s property.  Medical expenses are not covered under this portion of the policy.  In most cases, Property Damage Liability will involve covering the expenses of the other person’s vehicle if you are in an accident that is your fault.  It can, however, cover the costs of repairing or replacing other property that may be damaged by your vehicle, such as a house or a fence.

It is important to carefully think through the limits that you set for both your Bodily Injury Liability and your Property Damage Liability.  If you set the limits too low, you will not have an adequate amount of coverage if you or another driver covered by your policy causes an accident to occur.  In this case, you can put yourself at a great financial risk. 

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