What is Automobile Liability Insurance?

Even if you have carried automobile insurance for years, you may not understand exactly how it works. A typical car insurance policy is made up of several coverages, which are designed to provide specific types of protection. One of the most important elements is automobile liability insurance.

What is Automobile Liability Insurance?

Liability insurance is coverage that pays for the costs incurred by other drivers and their passengers when you cause an auto accident. There are two elements of automobile liability insurance – bodily injury liability and property damage liability.

Bodily injury liability pays for the injuries of other drivers and passengers, as well as injuries to pedestrians. It covers medical and surgical costs, hospital stays, emergency room charges, and rehabilitation expenses.

Property damage liability pays for the repair or replacement of the other driver’s vehicle, as well as personal property carried in the other driver’s car at the time of the accident. It also pays for other property you damage, such as fences, utility poles, and road signs.

Do I Have to Carry Liability Insurance?

Most states require drivers to carry automobile liability insurance in order to legally drive. Each state sets a minimum limit that all drivers must carry; however, you are free to choose higher limits.

If you are caught driving without insurance, you can incur fines or lose your driver license. Several states permit police officers to impound uninsured vehicles, and a few even require imprisonment for repeat offenses.

Aside from state requirements, it is important to carry liability insurance to protect yourself against lawsuits. If you cause an accident, and you do not have this coverage, a driver or insurance company can sue you for expenses incurred as a result of the accident.

Automobile liability insurance is an indispensable tool that can protect you against financial disaster. Since it is required in most states, it can protect your driving privileges as well.

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