What exactly does motor vehicle liability insurance cover?

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Liability insurance provides important protection, but it is limited.

Key points

  • Most drivers are required to carry liability insurance in the event of a car accident.
  • This type of auto insurance provides vital protection in case a driver causes an accident.
  • Drivers may not have full protection if they only purchase car accident liability insurance.

In most places in the United States, drivers are required to carry liability insurance in the event of an automobile accident. But what exactly is this type of coverage and why do motorists have to buy it?

Here’s what drivers need to know about this particular type of car insurance.

This is the protection that liability insurance puts in place

Motor vehicle liability insurance generally offers a few main types of protection:

  • It pays for losses that an insured inflicts on others by causing an accident in which someone is injured. For example, if an insured driver causes an accident that breaks another motorist’s arm, auto accident liability insurance would pay for the victim’s medical expenses, any lost wages, and pain and suffering.
  • It pays for losses a policyholder causes to property. If a covered driver crashes into another vehicle and totals the other driver’s car, liability insurance will pay to replace him.
  • It covers court costs. If a policyholder faces a personal injury lawsuit for injuring another motorist, liability insurance will pay for the legal defense costs necessary to resolve the case.

The specific amount the insurance will pay depends on the coverage limits a driver chooses when purchasing car insurance.

For example, in some states motorists are required to purchase a minimum of $25,000 per person and $50,000 per accident in bodily injury liability and a minimum of $10,000 in property damage liability. If a driver obtained the required minimum coverage, the insurer would pay $25,000 per injured victim up to a maximum total of $50,000 for a single accident. And he would pay a maximum of $10,000 for the repair or replacement of property.

The minimums are generally relatively low coverage which can leave motorists without much protection in the event of a serious accident. Because coverage limits can be exceeded very quickly, drivers should seriously consider purchasing auto liability insurance above the minimum amount required by their state.

What does motor vehicle liability insurance exclude?

Motor vehicle accident liability insurance will pay when a policyholder injures others, but it will pay nothing if the covered driver damages their own vehicle, injures themselves, or is injured by someone without insurance appropriate.

If a motorist wants to be protected against losses to their own car after causing an accident, the driver will need to purchase collision insurance. To protect against theft or other types of damage, such as hail damage or vehicle vandalism, the driver will need to purchase comprehensive coverage. And to protect against losses caused by a driver without adequate insurance, the motorist should purchase underinsured and/or uninsured motorist coverage.

While none of these optional coverages are required by law, unlike auto liability insurance, a driver without them could face significant financial loss if something goes wrong.

Drivers should understand the limits of car accident liability insurance and should ensure that they carefully consider all of their coverage options to get all the protections they need while driving their car.

Make sure you choose the right auto insurance coverage

Car insurance is something most people don’t think about very often. Although there are many factors that lead people to change car insurance companies, it is important to educate yourself to ensure you choose the right coverage for you. The right coverage means not paying for coverage you don’t need and not giving up coverage that is right for you. Although price is a major factor, we also consider other factors such as customer service and the claims process when choosing what we believe are the best car insurance providers.