My Car Was Stolen & Breaking Down Liability Car Insurance Coverage

The last two months of my life have involved car insurance.  I don’t want to go into too many details, but our vehicle was stolen, eventually found, and now we are working with the insurance company to get our vehicle back to as close when it was taken as possible. This is a moment that I am happy I listened to my wife and kept the full insurance coverage for our vehicle, rather than trying to save a few extra dollars each month with liability insurance only.  With all of that being said, I can’t stress enough how important it is to understand the type of car insurance that you have, what types of car insurance are available, and what car insurance fits your needs best. Today, I wanted to share one of the most common car insurances available in the market today, liability insurance.

Car insurance is an important topic to understand for any car owner.  Cars are dangerous machines; even with all the advances that have been made in user safety over the past few decades, cars are still boxes of metal traveling at high speeds. If anything goes wrong, the damage can be fairly severe.

Car insurance is meant to be a reliable, affordable way for consumers to protect themselves financially from uncontrollable circumstances and situations that may lead to a tragedy.  Car insurance is meant to serve you.

 First of All: What Is Liability Insurance?

In car insurance terms, liability insurance is one of two common insurance types dependent largely on what state you live in. In some states, liability insurance is replaced by no-fault (or personal injury protection) insurance.  What’s most important to understand about auto insurance, is that after an accident, your insurance company usually carries the costs of the accident unless there’s concrete evidence of foul play or negligence.  However, the defining question is – whose insurance will cover the cost?

In no-fault states, PIP insurance is your insurance.  That means no matter who caused the accident, each person’s insurance policy covers their own damages.

But in states where no-fault laws don’t exist, liability insurance takes care of your costs.  Liability insurance applies if you’re found to be at fault during an accident – if neither negligence nor foul play played a part, then your insurance will cover the costs of any bodily harm and other damages of the person or persons you hit.  Keep in mind that liability insurance does not cover your own property or bodily injury costs.  These damages include:

  • Medical injuries. Qualifying medical injuries, that is.  A scraped knee isn’t enough for your insurance provider to pay for the wound dressing, whereas cracked ribs or a dislocated shoulder will warrant their help.
  • Lost wages. If your hospitalization takes place over the course of several business days, your insurance will cover earnings missed due to bodily injury.  The exact terms of how much will be paid back depend on your insurance provider, the victim’s profession, and the policies of your coverage.
  • Funeral expenses.In the event that the victim’s policy doesn’t, your coverage may also carry the costs of their funeral.

Liability insurance is mandatory, no matter what state you’re living in.  In some states, the minimum is lower than in others.There are always two distinct categories that liability insurance covers:

  • Bodily injury liability: This category is straightforward – it covers injuries sustained by the opposing party after an accident. This includes long-term nursing, lost wages, and pain and suffering.
  • Property damage liability: If the accident caused property damage, then this coverage pays for the damage sustained to the victim’s car or other property, such as a fence, house or mailbox.

Insurance minimums do vary from state to state, but according to Department of Motor Vehicles, most liability insurance minimums are broken down into three groups: per person, total bodily injury, and property damage.  An example listing on a policy would be 15/30/25.

What About You?

Remember, liability car insurance coverage doesn’t cover your damages.  If you use a comparison site like CoverHound, you’ll find that there are other types of insurance for that, like collision insurance, or if you really want thorough protection, comprehensive coverage.

Remember Your Limits

Calculating your limits is pretty simple.  If your insurance policy covers damages for $30,000 per person, and $60,000 for total bodily injuries, and then an additional $15,000 for property damage, then let’s take an example of an accident with three injured people.

  1. Person #1 had injuries worth $12,500 in damages.
  2. Person #2 had injuries worth $20,000 in damages.
  3. Person #3 had injuries worth $15,000 in damages.

If the total cost of the accident exceeds $60,000, or if a single person had to have surgery and a medical bill that exceeded $30,000, then you’re faced with having to pay out of pocket.  According to the Insurance Information Institute, a 47-year-old sedan owner with a clean driving record and a policy of $100,000/$300,000 bodily injury liability coverage would pay roughly $1,115 annually for insurance in 2014.

It’s always a good idea to check with your insurance provider to see what your limits are set at, and to get a good idea of how an accident could affect your financial situation.

18 Responses to “My Car Was Stolen & Breaking Down Liability Car Insurance Coverage

  • Damn. Sorry to hear. I had a car stolen once and it was found head on into a tree and I was without full insurance. Worst feeling ever. Good luck. Hope everything works our for you.
    Brian @ Debt Discipline recently posted…Car Insurance: How to get the Best DealMy Profile

    • EvenStevenMoney
      2 years ago

      Thanks Brian, yeah it hasn’t been the best situation in the world, I really am thankful for insurance in this case.

  • Ugh getting your car stolen definitely stinks! I’ve never had it happen to me, but I know I would be thankful for being fully covered!
    Michelle recently posted…Monthly Income Report Roundup – Check Out How These Bloggers Make Thousands Each Month!My Profile

    • EvenStevenMoney
      2 years ago

      That’s exactly right it could have cost us more if we were not fully covered.

  • Oh man, sorry about your car! What a pain. I’m sure I overdo it in the insurance department, but I’m definitely a fan of comprehensive insurance. As my dad once put it to me, “If the house burns down with the car in it, you’ll be a out a car.” And comprehensive gives me that peace of mind.

    • EvenStevenMoney
      2 years ago

      Yeah we just got it back this week, but it’s been a long 2 months, happy to have insurance and full coverage at that.

  • Oh my gosh! I can’t imagine having your car stolen. Yikes! I’m glad you are getting things worked out now.

    • EvenStevenMoney
      2 years ago

      Yeah I think the worst of it is all over, if that’s possible.

  • I listened to my wife this month too on this topic. We bought a used 2009 suv worth $7500. I was just going to do liability to save the extra money as we don’t drive many miles. My wife had me price insurance with the comprehensive coverage & it came to an extra $15 per month. We said we can afford that additional costs for the “What Ifs” in life.
    Josh recently posted…A Student Loan ManifestoMy Profile

    • EvenStevenMoney
      2 years ago

      Exactly, I mean $15 month, $180 year, $1,800 every 10 years. Obviously the insurance companies do the math on this, but once instance in 10 years and it’s worth 4X anything you would pay in that time.

  • Definitely pays to know what’s covered and what isn’t. Thanks for the reminder. I have had a lot of recent experience with landlord policy difficulties, as in termination of coverage for seemingly minor issues to fix, almost as if they are benefitting from the gap between initial coverage and reinstatement, makes me wonder. Thanks again
    Pad Adventure recently posted…The Venerable Benefits of Peeing Outside: A Back to Basics ApproachMy Profile

    • EvenStevenMoney
      2 years ago

      I’d be interested in hearing more on the landlord policy difficulties, we haven’t had any major issues with our investment property certainly could be the reason. Send me a message or point me in the right direction on your site, I’d be curious to learn a little more about it. Thanks.

  • Wow! That is crazy man! I keep full insurance on my vehicle as well but I admit I have been thinking about switching to liability to save some money. Definitely thinking twice about that now!
    Alexander @ Cash Flow Diaries recently posted…March 2016 Net Worth UpdateMy Profile

    • EvenStevenMoney
      2 years ago

      Measure twice, cut once. Very similar thought process for cutting a board as well;)

  • This post gives a ton of important and useful information. Everyone should be aware of what types of insurance cover what incidents. It’s really important to know what your options are after an accident or breakdown happens. Nicely put. Thanks so much for sharing this!

  • I think (in my opinion) the only time you want to carry liability only is when your car is worth less than 2 to 3 thousand dollars. Almost a junker type. Or whatever you can afford to lose up to 5 thousand or so.
    Greg Fowler recently posted…Utah’s Car Insurance Minimums Plus Penalties For Driving Without CoverageMy Profile

  • Sorry to hear that dude, be aware of what types of insurance cover what incidents. Keep it up dude!

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