What Does Liability Insurance Cover?

While personal injury or property insurance coverage applies to damage accrued to you or your vehicle after an accident, in most states, required auto liability insurance covers you for bodily injury accrued to someone else or their property. Liability insurance protect the insured, or “follows the driver”, not the car. Though bodily injury and property coverages are separate, they are both required in states that necessitate liability insurance by law, usually subject to a minimum coverage amount.  With all the above having been said, you’re probably still wondering what exactly liability coverage pays for. Take a look at this handy explanatory guide, brought to you by the Mercedes-Benz of Warwick finance and insurance experts.

How Does Liability Insurance Work?

Liability insurance is an overarching term used to describe two common types of insurance: bodily injury and property coverage. Each can have their own set limits and state-mandated minimum limits. You can always buy more coverage if you assess your risk to be higher. Insurance is all about mitigating risk, so it’s important not to under-insure yourself! That said, it’s always a wise idea to talk to your insurance agent or call your insurance company for help determining the right amount of insurance for you so you’re neither under nor over-insured. With all the above out of the way, it’s time to delve deeper into what bodily injury and property damage cover:

Property Damage

• General property damage (house, personal property, etc.)
• Repair expenses
• Vehicle damage
• Necessary part replacement
• Pets

Bodily Injury

• Medical and hospital bills
• Any long-term nursing care that may be needed
• Funeral expenses in the event of a fatal accident
• Rehab
• Pain and suffering
• Lost earnings

Remember: liability coverage protects you against having to pay for damage or bodily injury to the victim of the accident, you if you’re at fault. If you’re under-insured, you could wind up having to pay significant medical bills or property damage reimbursement for anyone who’s put an insurance claim against your auto policy. If, however, you’re over-insured, you could wind up paying too much on a monthly basis with little to no added benefit(s).

Liability Coverage Limits

When talking to your insurance provider about setting up an auto policy for yourself in East Greenwich or Cranston, you should discuss coverage limits, which can be split, or housed as a single limit. Here’s how that works:

• With a single limit, there is no total limit per person, the lump sum will simply be spread across all those injured and all property damaged
• A split limit will allow you to select individual maximums for bodily injury payments per person, for all people injured, and all property damage

Learn More About Insurance Coverage with Mercedes-Benz of Warwick

We can help you better understand the process of obtaining both personal insurance coverage and liability coverage here at Mercedes-Benz of Warwick! What’s more, our finance experts can easily walk you through more car buying tips to ensure that your monthly payment and insurance payment work well together under your budgetary needs.