Auto Liability Insurance
Unlike any other coverage, liability auto insurance is the only protection required to some extent in each of the 50 states. While each state has different required minimums, the coverage is necessary if you wish to drive legally. Simply put, auto liability coverage reimburses the other parties in an accident that is your fault for their resulting bodily injuries and/or property damage. Without liability coverage insulating you, you would be legally bound to pay for these losses out of pocket. Before you search for liability insurance quotes, review the following information on understanding and selecting liability coverage.
The Elements of Auto Insurance Liability Coverage
A standard auto liability insurance policy essentially boils down to three crucial numbers: the amount of bodily injury expense covered per person, the amount of bodily injury expense covered per accident, and the amount of property damage covered. You might see a liability auto insurance policy described as a 15/30/5 policy, for example, which is actually the legal minimum for California drivers. These figures mean that the policy covers $15,000 of medical expenses (of the other parties) per person, $30,000 of medical expenses per accident, and $5,000 of property damage. By default, when you request liability insurance quotes, your insurer should take your ZIP code into account and calibrate your policy to conform to your state's legal minimums.
Why Auto Liability Coverage Matters
Drivers usually purchase liability auto insurance because they want to avoid getting a costly ticket for driving uninsured or having their driver's license revoked or suspended. In reality, a ticket or license suspension is the least of your worries if you are driving without auto liability insurance coverage. Even if you are involved in a minor accident without liability protection or with insufficient liability coverage, you could seriously jeopardize your financial security. The other drivers who sustained injuries or property damage as a result of an accident you caused could file suit against you and obtain a prohibitively expensive judgment.
Unless you can satisfy the judgment out of pocket, you could stand to lose your car, your house, your investments, retirement savings, and other assets. Everything you've worked for could be liquidated to pay for the damage you did in a single accident if you do not carry auto liability coverage or if you don't carry enough. Remember your state's mandatory insurance laws are simply a minimum, not an ideal, recommended amount. Most drivers need much, much more protection than the legal minimum. If you have considerable assets, you should carry as much auto insurance liability coverage as you can afford to safeguard your financial stability.