Car insurance protects the owner of a vehicle against losses and damages related to owning and operating the vehicle. There are several different types of auto insurance such collision insurance, comprehensive insurance and liability insurance. Liability insurance protects drivers against damage they cause to the other drivers or property as the result of an accident. In other words, liability coverage pays for damage caused by accidents that are your fault.
Liability coverage allows drivers who cause an accident to make insurance claims and have their insurance company pay for the damage they cause to others. Unlike collision insurance and comprehensive insurance, liability insurance specifically deals with damages caused to other drivers. In other words, if liability insurance is the only insurance you have on your vehicle and you cause an accident, damage done to your vehicle will not be covered.
There are three main types of liability insurance that are usually grouped together under the heading of "liability coverage." Bodily injury liability coverage insures against bodily harm you cause to each occupant others. Bodily injury coverage is divided into to parts: per-person coverage and total accident coverage. Per-person coverage is how much damage is covered for each individual in the other vehicle. For example, $25,000 per-person coverage would mean your insurance company would pay, at most, $25,000 toward bodily injury caused to the other drive. Total accident coverage is the total amount that the insurance company will pay toward bodily injury in an accident. For instance, if the other car has five passengers, you might reach the limit. Property liability insurance is the third type of liability insurance, which covers damage done to the other person's vehicle.
A certain amount of auto liability coverage is required by state laws. The amount of coverage required varies from state to state. The minimum amount of coverage required by law may be inadequate to cover all damages caused in a severe accident or an accident that involves expensive vehicles.
Liability coverage is beneficial in that it can help pay for damages done to others that a driver might not be able to afford otherwise. It can also reduce the chances of being sued for damage caused. For safe drivers who rarely cause accidents, liability coverage means that damage caused during an accident will likely be covered by the other driver's insurance.
Collision coverage is an optional coverage that protects against damage to a car in auto accidents, and comprehensive coverage protects against damage from other events, like fires and storms .Many drivers opt to purchase these types of coverage since liability insurance will protect you and your car only if an accident is not your fault and the other driver has adequate liability insurance.