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Liability coverage protects you if you (or another person
driving your car with your permission) injure or kill someone or
damage property.
For example, let's say you run a red light, strike another car
and injure the driver. Your liability coverage obliges the company
to defend you - in court, if necessary - and pay claims to the other
driver for vehicle damage and bodily injuries, including medical
and hospital costs, rehabilitation, nursing care, and possibly lost
income and money for pain and suffering. (The liability section
of your policy does not compensate you for damage to your own car
or any injuries to you. They are covered by other parts of the policy.)
Now assume that you're involved in a collision at an intersection
with no witnesses or evidence to pin the blame on either driver.
Again, under your liability coverage, your insurer agrees to defend
you against most proceedings the other driver may take against you.
The company limits its liability payments to the policy limits,
or the amount of coverage you select. You can be held personally
accountable for any excess.
Liability coverage is mandatory in nearly all states (the others
have financial-responsibility laws that can be met by purchasing
this coverage). But state requirements are modest -- typically $20,000
to $30,000 for bodily injury suffered by one person in an accident,
$50,000 for all people hurt in the same accident, and up to $25,000
for property damage resulting from that accident.
Liability coverage typically helps to provide you with peace of
mind. Why? Because it helps protect you from covered damage your
car does to others…damage for which you are legally liable.
Liability – Who’s typically covered
You, family members or relatives who live with you when (1) driving
your car or (2) driving other cars with that vehicle owner’s
permission. Other people driving your car when you’ve given
them permission.
Liability – What’s typically covered
It pays for you (and those covered by the policy) for legal defense
costs, cost of bail bonds, and emergency first aid to others. It
pays the people you’ve injured for property damage, loss of
services, bodily injury, sickness, medical services, disease, loss
of income and death.
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