Choosing Liability Coverage for Auto Insurance
Most states require licensed drivers to have liability auto insurance coverage. This form of coverage pays for damages that you cause to other people's property or injuries that you cause them in an accident. It is a basic form of coverage that can protect you from having to pay for these damages and medical bills out-of-pocket, but you can also get stuck with paying these expenses if your liability coverage does not have a very high limit. Thus, it is important that you look at all of your liability coverage options before choosing a plan.
First, there are two main types of liability coverage in regard to driving: bodily injury and property damage. Bodily injury liability, or BI, includes injuries or deaths that you can cause in an auto accident and all related expenses. You may have to pay medical bills, make up for lost wages, attempt to equate for pain and suffering, and even cover funeral home costs. Keep in mind, however, that BI does not cover any injuries to you or people under your plan.
Next, property damage liability, or PD, generally covers the damage that you can cause to another person's vehicle in an accident. However, the injured party can also hold you responsible for other properties, such as fence or house damage if you crash through their yard and into their home. Again, this does not cover damages done to your own car or property.
When choosing a liability policy, it can be tempting to go for the one that has the lowest cost, and therefore the lowest limit on how much the insurance will cover. However, this can mean that you are responsible for paying any additional costs out-of-pocket. You should choose an insurance policy that helps you protect your financial assets so that you don't have to worry about your future financial stability.
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