Liability Coverage - What is it and How Do You Get It?

Liability coverage comes standard on full-coverage insurance policies. Liability coverage, in short, covers the insured for an accident that is deemed to be their fault. For example in the case of an accident in which the insured rear-ends someone at a stoplight their insurance will cover the damages to the other person's car under liability coverage.

There are two different types of liability coverage, but both are normally standard on full-coverage policies. Bodily injury liability coverage covers the medical expenses of the other party if they are injured in the incident. Property damage liability coverage covers all damage done to property at the time of the accident. That includes damage done to the parties car, belongings or any property around the scene that was damaged as part of the accident.

Bodily injury liability coverage covers everything from emergency medical assistance, medical expenses incurred after the accident because of the accident, loss of income, legal fees, funeral costs or anything else that maybe caused by the accident. The coverage also offers the insured legal expertise if the case goes to trial for settlement.

Liability coverage does come with some strings attached. Each policy will state how much the insurance policy is willing to cover and how many people they are willing to settle with in the case of an accident. For example if the insured has a 100,000 policy and 2 people are injured in the accident the insurance company will cover up to 50,000 for each person injured. If each person happens to win a larger settlement the insured will be responsible for any remainder after what the insurance company and policy has stated as coverage. Many policies will cap the number of individuals they are willing to pay out for. For example if the policy states that it will pay 10 people for injures incurred in an accident and 12 people are injured the insured will be responsible for 2 of the settlements that come from the accident.

Liability coverage is most often offered in states that are not no-fault states. No-fault insurance policies are required in some states; New York is one example. Under no-fault laws the insured is not deemed responsible for losses incurred in an accident regardless of who caused the accident. The laws have been put into place in an attempt to protect both drivers involved in an accident in the case of bodily harm or property damage.