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