How to Choose Liability, Bodily Injury, and Property Damage Coverages

We all need a little extra protection now and then, so it's important to consider liability, bodily injury, and property damage coverage when shopping for a car insurance policy. These three coverage types are designed to protect you financially in an accident or other incident that causes damage to someone else's property or person. In this article, we'll outline the basics of these three coverages, how they differ, and what to look for when selecting a policy.

What is Liability coverage?

Liability comes into play when you cause an accident or other incident that damages someone else's property or person. Your liability coverage helps pay for the medical costs and repair costs associated with the incident.

Liability coverage typically consists of two parts: bodily injury liability coverage and property damage liability coverage.

Bodily injury liability coverage helps pay for medical bills, lost wages, and other costs associated with a person being injured in an accident caused by you.

Property damage liability coverage helps pay for repairs to any property damaged in an incident caused by you.

Is there any Risk to Which Liability, Bodily Injury, and Property Damage Insurance Won't Provide Coverage?

If you or your passengers suffer an accident, liability insurance will not cover the medical expenses associated with the accident. In addition, the same goes for your car. If you are at fault for an accident, your liability coverage will not provide any protection against the cost of repairing or replacing your car. But don't worry; there is different coverage that can protect these situations.

Do You Need Liability Insurance?

Everyone driving a car is advised to have liability insurance coverage. It is required by law in many states, and by carrying it, you can protect yourself from potentially expensive lawsuits if you are liable for an incident.

What is the Ideal Amount of Liability Coverage You Should Have?

It all depends on your circumstances. How much can you spend on car insurance coverage, and how much danger are you willing to accept?

When looking for liability coverage, your insurer will provide several possible limits to select from. When selecting a limit, you should remember that this is the maximum liability coverage your policy can pay out in case of an accident. So make sure to choose wisely!

Raising your insurance limits increases the amount of money paid out by the insurer, meaning you will have a higher rate. Conversely, if you lower those same limits, less is paid out and thus resulting in a cheaper price tag on your policy.

Take note: if you, unfortunately, have an accident, and the costs exceed your insurance limits, you may find yourself stuck having to pay for them. For example, if you are in an accident costing $15,000, but your policy limit is only $10,000, you will be responsible for the remaining balance.

So it's best to select the limits that best suit you and your situation. Also, ask for car insurance quotes to ensure you get the best coverage for a price you can afford.

What is the Maximum Amount of Coverage Your Insurance Provides?

When opting for Liability insurance, you can select individual coverage limits for Bodily Injury and Property Damage.

When selecting Bodily Injury Liability coverage, determine the maximum amount your insurer will pay out for each person and the total cost of an accident. For example, an insurer may offer a range of coverage limits from $20,000 per person to $100,000 in total.

For Property Damage Liability coverage, you can also select a limit from the range offered by your insurer. This is the maximum amount an insurance company will pay for damage caused by accident.

Related Reads: Everything You Need to Know About Personal Injury Protection Insurance.

The Bottom Line

Liability insurance is a key component of having car insurance. It protects you and your assets in case of an accident that causes bodily injury or property damage. Be sure to select the coverage that best suits you and your situation and research quotes for the best rates. No matter what, it's always best to be safe and protect against an unfortunate incident. If the worst happens, you can be sure you're covered. So make sure you get the right amount of protection today.