The Differences Between Different Forms Of Liability Car Insurance Coverage
When a customer is in the market for a new insurance policy, it helps to be able to understand the differences between insurance types. For instance, liability car insurance may be an important source of concern. Liability car insurance is what protects you against damage which you caused through negligence, and in all fifty states and the District of Columbia, there are state mandated minimums.
Liability car insurance is a kind of insurance which protects businesses and individuals against the risk of being sued for damages caused with a vehicle as a result of negligence on the part of the vehicle's driver. Liability car insurance will pay for legal costs and judgments against the insured if the policyholder is found to be legally liable for the damages. Insurance companies can and do make the determination that their policyholder is liable for such damages and may choose to settle a claim against the insured policy outside of court.
There are two types of liability car insurance to consider when understanding the differences between insurance types:
Property Damage Liability
Property Damage Liability is a type of insurance that pays for damages caused to physical property by the driver of the insured vehicle. For instance, suppose the policyholder lost control of his SUV and hit a parked car and then a fire hydrant. Water from the fire hydrant flooded a nearby business. Property Damage Liability would pay for the damage to the parked car, the fire hydrant and the business, but only up to the policy limit. If the policyholder had a policy limit of $50,000 and the damages from the accident totaled $65,000, then the insured would be personally responsible for the difference of $15,000.
Bodily Injury Liability
Bodily Injury Liability is a type of insurance that pays for injuries and death caused to other people by the driver of the insured vehicle. For instance, supposed that the policyholder hit and injured a pedestrian in a crosswalk. Bodily Injury Liability would pay for the pedestrian's past, present and future medical bills, time lost off work, and pain & suffering. Again, this insurance would only pay for damages up to the policy limit. If the damages for which the insured were legally liable exceeded the policy limits, then the insured would be personally responsible for the difference.
When you contemplate what kind of liability car insurance to add to your policy, and how much coverage to select for the policy limit, consider the differences between insurance types. It is good advice to consider how much you possess in terms of financial assets and income which needs to be protected. To fully protect yourself, don't be caught under-insured.