September 14, 2017

Understanding Liability Car Insurance Components And Criteria

Liability car insurance is defined as the legal obligation a policyholder to pay in case of a car accident, for other property damaged and personal injury. That can include loss of income and other less obvious issues. It is mandatory in every state. Some require higher minimum coverage than others do but it is the law that all licensed drivers who reside in the state carry this type of insurance. The minimums are a basic safety net but are not calculated to cover all potential financial obligations that may be incurred by the driver as a result of an accident that he caused. To be safe, it is wise to buy as much car liability as you can realistically afford. If you buy cheap car insurance, you will not be fully protected and that is what insurance is for.

Liability car insurance is represented by three numbers with the format 25/30/20. The first number is the amount that an injured party could receive in the event of an accident in which the insured driver is at fault. The second number is the total amount to be paid per event regardless of the number of people injured and the third is the amount of property damage to be paid per event. Although all states require minimum liability car insurance, the amount varies widely. Currently the lowest required minimum is 10/20/10 in Oklahoma and the highest is 50/100/25 in Maine.

Typical accident claims exceed the minimums, often by substantial amounts, so it makes good sense to purchase more coverage than it does to buy cheap car insurance. The odds are that if you do, you could be paying many times what your insurance company does in the event of a catastrophic incident. The fact is the being under insured can led to long-term financial disaster.

There are two types of liability car insurance. The first is bodily injury liability, which means that the insurer of the at-fault driver is responsible to pay the driver, and/or the passengers in the other vehicle an amount up to the limit stated in the policy. Bodily injury liability is not the same as personal injury coverage that pays for the policyholder’s injuries. The second type is property damage liability, which pays for damages to property, other than the vehicle, that is incurred as a result of the accident. This can include anything from light poles to mailboxes to trees and fences.

Having enough liability car insurance is important. To buy cheap car insurance is to be open to significant personal financial responsibility in the event of a serious car accident. Complete coverage is protection against that eventuality.