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Quick Lesson on What is Liability Insurance

Quick Lesson on What is Liability Insurance

Liability car insurance is a product for auto insurance that is required by every state. Liability PAYS and COVERS OTHERS. This insurance product will never pay to you as the owner of the policy. Is intended to protect you from getting sued but pays to other persons. Liability auto insurance is divided into two parts: bodily injury liability (BI) and property damage liability (PD). These two parts work together to pay (cover) others to whom you were at fault in the accident thus protecting your assets. Liability also pays any legal defense in the event that you’re sued because of an auto accident.

Bodily injury liability coverage pays for others’ injuries or death in accidents where you are at fault. This covers the driver and passengers in another car. It also covers a motorcyclist, bicyclist or pedestrian you harmed with your vehicle. Bodily Injury covers up to your limits, for the following: Medical expenses of an injured party, Funeral expenses of a fatality, Loss of income, Pain and suffering.

Property damage liability insurance covers damage to another person’s property from accidents that are your fault. “Property” includes: Vehicles, fence, building, fire hydrant, pole or landscaping.

Most states require you to carry liability car insurance or show financial responsibility laws. The simplest way to accomplish this is with car insurance. The minimum amount you must obtain varies by state. In California, we have a minimum liability limit of 15/30/5.

Liability insurance is broken down into three amounts also known as split limits: per person limit for bodily injury, per incident limit for bodily injury, and a property damage limit. For example, here in

California minimum is 15/30/5 and here is how you read it:

First number 15 = $15,000 and is the maximum amount your bodily injury liability will pay for injury-related expenses per other persons.

Second number 30 = $30,000 and is the maximum amount that your bodily injury liability insurance will pay out for all injuries per accident.

Third number 5 = $5,000 and is the maximum amount that your property damage liability insurance will pay out for all property damage per accident.

Bodily injury maximum limits per incident are always higher than property damage since medical bills tend to add up much quicker than property damage expenses.

Some states require that you purchase other types of coverages as part of your basic policy.  These extra coverages vary by state but many include: uninsured and/or underinsured motorist bodily injury coverage (UM or UMBI /UIM), uninsured motorist property damage (UMPD), personal injury protection (PIP) or Medical Payments.

In California, we are only required to purchase liability coverage BUT that doesn’t mean you shouldn’t ask to add other coverages to your policy, such as coverages for your own vehicle in case of any physical damage done to it.

If you want to learn more about other coverages and get a quote, give us a call today! 



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