Common Liability Insurance Questions

Deciding how much liability insurance you need can be a confusing process, especially if you're purchasing auto insurance for the first time. Your insurance agent can walk you through the process of selecting the right insurance package for your needs, but it can help to learn a little about liability insurance and other types of insurance plans before you send in your application.

Here are some common questions and answers about liability car insurance:

Is liability insurance required?

Liability coverage is required in all 50 states, but the level of coverage varies from state to state. You will need to work with your insurance agent to find out if what your state's minimum requirements are, and what the recommended amount of liability coverage is for your vehicle.

What does liability insurance include?

Liability car insurance includes three types of coverage: bodily injury for each person, bodily injury per accident, and compensation for property damage. When you are reviewing different liability insurance options you need to make sure you are aware of the extent of coverage (dollar amount) of each of these components.

What do the three numbers next to my liability insurance mean?

Most insurance providers list liability insurance as a set of three numbers, such as 30/50/20. This means that this type of insurance package includes $30,000 in bodily injury coverage per person, $50,000 in bodily injury coverage per accident, and $20,000 in property-damage coverage per accident.

Does liability insurance cover medical bills?

Liability insurance will cover the cost of medical bills for those who are injured during the accident. The "bodily injury" portion of your liability insurance plan covers medical expenses for bodily injuries, compensation for loss of income because of injuries associated with the accident, and medical services for sickness and disease that are caused by the accident.

Will liability insurance pay for car repairs?

Liability insurance will not pay for the cost of repairs or replacement of your car. You can file a claim for car repair or replacement through collision insurance only.

Should I purchase any type of coverage on top of liability insurance?

Some car owners choose to get "full coverage" car insurance which includes comprehensive and collision insurance. Comprehensive coverage provides coverage of the vehicle in the event of theft, water damage, fire and some types of natural disasters. Collision coverage will pay for the costs of repairing or replacing your vehicle in the event you are in an accident, and the accident was your fault. You will be required to purchase collision coverage and liability insurance (usually comprehensive and collision) if you are financing a vehicle or getting a car loan from a financial institution.

Sources:

CarInsuranceRates.com - Guide to Liability Only Car Insurance Coverage

Insure.com - Car insurance basics

Allstate - Liability Coverage