How Does Liability Insurance Work?

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How Does Liability Insurance Work?

via Auto Insurance Quotes | Car Insurance Quotes by on 11/20/11

How Does Liability Insurance Work?
How Liability Insurance Works
Insurance is actually comprised of two types of coverage: bodily injury liability (BI) and damage to property liability (PD).
Bodily injury liability covers the expense of injuries or death, and could pay for expenses such as medical bills, suffering and pain, and loss of income. It's important to keep in mind that this level of coverage only will pay for the bodily injuries of the individual or people in the other vehicle – not the automobile of the person who caused the accident. Coverage can also be limited based on the limitations and statues established by the state. The amount of coverage also depends upon your policy.
Property damage liability covers the expense of damages to another person's property in the event of an accident. In case your car hits a fence, damages part of a house, or collides with a storefront, damage to property liability will cover the costs linked to the incident, up to the insurance coverage limit. When the cost of damages exceeds this limit, you will have to pay for the excess costs up front.
Liability Insurance Coverage
When people are injured in a vehicle accident or there is extensive damage to property, liability insurance will pay for the following kinds of expenses:
- Medical expenses for bodily injury
- Medical services linked to the incident
- Emergency assistance in the scene of the accident
- Damages as a result of the accident
- Legal defense fees or bail bonds for anybody that is listed on the insurance policy
- Funeral expenses in case of death from the accident
- Damage to property to homes, storefronts, fences, walls and government property
- Car repairs for the other driver's car
- Vehicle replacement costs for that other driver's car
When choosing liability insurance from your auto insurance provider, you need to review the coverage limits and ensure you are comfortable with the amount you could be responsible for paying if costs exceed the minimum requirements. Some states allow drivers to buy extended liability coverage which can provide more protection and assistance to cover more of the costs in case of a serious accident.

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