What Liability Auto Insurance Doesnt Cover
Liability auto insurance wont pay for your own medical bills or repairs to your car its only designed to pay others for the damage you cause behind the wheel.
To cover your own bills, youll need to rely on other types of insurance, such as health insurance for your medical expenses and collision insurance for repairs to your vehicle. If you want more protection, consider buying full coverage car insurance. Full coverage isn’t a specific type of policy, but refers to a combination of coverage types including liability insurance and comprehensive and collision coverage.
How Much Medical Payments Coverage Do I Need
What does it cover? Medical payments coverage, or MedPay, typically covers medical expenses you or your passengers receive after a car accident, even if youre riding in someone elses car.
Is it required? MedPay is required in just two states: Maine and New Hampshire .
How much MedPay coverage should I have? Coverage limits typically start at $1,000 per person and max out at $10,000 per person. If you have health insurance, it might be worth getting enough coverage to pay for your health plans deductible. If you and your passengers dont have health insurance, you should consider a higher limit or maxing out your coverage.
Important note: Personal injury protection also provides coverage for medical expenses, in addition to lost wages and funeral expenses. If you have a choice between PIP and MedPay, PIP is almost always a better choice due to its expanded coverages.
Caitlyn and Chris are in an accident while riding as passengers in their friend Teds car. Everyone is OK, but Chris and Caitlyn get checked out at the hospital just to be on the safe side. Chris gets a $750 X-ray, while Caitlyn gets a $1,000 CT scan. Fortunately, they have MedPay coverage up to $2,000 per person, so their auto insurance pays for both of their bills.
How Much Personal Injury Protection Do I Need
What does it cover? Personal injury protection, or PIP, is like MedPay in that it covers you or your passengers medical bills. However, depending on your state, it can also cover lost wages, funeral expenses, and even housecleaning or child care services if your injuries prevent you from doing regular activities.
Is it required? Some states require PIP, but it isnt required or offered in most.
How much PIP coverage should I have? PIP coverage limits vary between states, with some maxing out below $10,000 per person or as high as $25,000 per person. If you already have health insurance or other insurance policies that cover the same expenses as PIP, your states minimum coverage levels may suffice. However, you should consider adding more PIP coverage if:
- You have health insurance with low limits, coverage gaps, or high deductibles and co-pays
- You want additional coverage for lost wages, funeral expenses, or child care
- You frequently give rides to other people who could hold you responsible for medical expenses after an accident
Its Chris turn to lead the office carpool. After picking up three of his colleagues, he ends up in a fender bender that leaves two of his co-workers with $500 in medical bills each. They file a claim with Chris insurance which provides $2,000 in PIP coverage per person enough to cover both of their medical bills.
Learn more about personal injury protection, including choosing the right coverages and amounts.
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How Much Uninsured Or Underinsured Motorist Coverage Do I Need
Approximately 12 percent of the cars on the road do not have insurance, according to the Texas Department of Insurance.
If you sustain injuries or property damage in an accident caused by an uninsured driver or a driver with insufficient insurance to cover your losses, then your only option for seeking compensation may be to file a claim against your UM or UIM coverage.
Its typically wise to purchase as much UM and UIM insurance as you can. At Kraft & Associates, P.C., we recommend at least $100,000 per person and $300,000 per accident in UM and UIM bodily injury coverage. You should also purchase UM and UIM property damage coverage equal to the value of your car.
Tips For Lowering Your Auto Insurance Premiums
Take the highest deductible you can afford. If you choose to buy comprehensive and collision coverage, be aware that collision pays for physical damage to your car as a result of collision with another object, while comprehensive pays for damage from most other causes, including fire, vandalism, flood and severe weather. Also, always remember to drive safely, doing your best to maintain a good driving record.
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Provisions Of Property Damage Coverage
According to the auto insurance website The Zebra, most property damage liability policies cover these expenses for the other parties involved if you cause an accident:
- The cost of losses incurred by a business that had to close because of damage
- Legal fees for a lawsuit filed against you for property damage
- Damage to fences, housing and other stationary objects
- Damage to other vehicles
- Any other recurring costs resulting from accident damage
You cannot use your property damage liability policy to cover damage to your own property or vehicle. Depending on the incident, you would need either a comprehensive or collision policy to cover those costs.
If you have an accident and the officers at the scene and/or the insurance company decides that you have primary fault for the accident, the other driver will make a claim against your liability policy for the cost of repair or replacement for their car. This is called a third-party claim. Remember that the insurance company will only pay up to your policy limits in this situation, so you could end up on the hook for the cost of excessive damages if your policy limits don’t fully cover the cost of their repairs.
Does It Ever Make Sense To Have Liability
There are some instances where only carrying liability coverage makes sense. If your car doesnt have much in the way of cash value, it might not be worth it to carry comprehensive or collision coverage. Drivers who can afford to replace their car out-of-pocket may not want to spend the extra money on full coverage car insurance.
Commonly referred to as the 10% rule, if your annual cost for full coverage would be more than 10% of the vehicles actual cash value, you can drop your comprehensive and collision coverage.
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Property Damage Liability Insurance
Damages to vehicle. If you cause an accident and damage someone elses vehicle, youll be responsible to pay for the resulting expenses. This could include anything from backing into another car and putting a dent in the bumper to totaling someones car. Property damage liability insurance can help cover the costs to repair or replace a damages to the vehicle.
Damages to property. Sometimes car accidents occur that dont involve another vehicle. If you cause damage to someones property, like if you accidentally back into their mailbox or fence, property damage liability can help pay to repair or replace the damaged property.
Property damage liability insurance doesnt pay for damages to your car. Thats where and step in. These are optional coverages that can keep your vehicle safe from the unexpected.
What Is The Difference Between Collision Insurance And Property Damage Liability
The difference between collision insurance and property damage liability is another major confusion among drivers. Collision insurance is when you get into an accident and your vehicle gets damaged. The auto insurance company will pay for the damages caused to your property and not the victim.
While property damage liability will cover the charges for the damage caused to the other persons property. You will not get coverage for your personal property damages.
Lets understand this with an example
- you get into an accident with another car, now both the cars are damaged.
- The cost to repair the damages of another car will be covered in your property damage liability. It will be based on the limit of your coverage in the policy.
- If the policy limit is $5000 and the cost of repair is $7000 then you will have to pay $2000 from your pocket. Along with that, the cost of damage repair in your car will also be covered from your pocket.
- But if you had collision insurance then the cost to repair your car and the extra $2000 for the repair of another driver will be covered by the collision insurance policy.
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Other Types Of Coverage
When you’re shopping for auto insurance, you may see some other, totally optional types of coverage. Those can include:
- Roadside assistance, such as towing
- Rental reimbursement, if you have to rent a car while yours is being repaired
- Gap insurance, which covers any difference between your car’s cash value and what you still owe on a lease or loan if your car is a total loss
Whether you need any of those will depend on what other resources you have and how much you could afford to pay out of pocket if you must.
What Does Auto Liability Insurance Include
Liability coverage includes property damage and bodily injury coverages.
Property damage covers damage to the other party’s property. This could include damage to vehicles, a yard, light pole, or other property damaged because of the accident. Other things may include:
- A rental vehicle while the other person’s car is being repaired
- Diminished value, the difference between the value of the vehicle if there had never been damage and the value after repairs have been completed
Bodily injury covers injuries sustained by another person because of the accident. This can include:
- Medical bills
States may have different requirements on who can file a bodily injury claim against you.
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Liability Coverage Vs Car Value And Assets
When it comes to car insurance, there are two major types of coverage: liability, which covers damage you may do to someone else and their property, and everything else, which covers damage that happens to your property.
Liability-only car insurance is cheaper and is a coverage requirement in almost every state, with each state mandating its own minimum coverage levels. While choosing the minimum required levels of coverage is the cheapest option, it isnt the smartest one. Some states have low liability minimums, with California and Pennsylvania requiring as little as $5,000 for property damage coverage.
The smartest thing for drivers is to increase their liability levels as high as they can reasonably afford to go. If you are at fault in an accident and injure someone else or damage their property, you will be held liable for their expenses. Drivers without enough liability coverage to pay those costs will still be held responsible. The courts can seize your assets and garnish your wages to pay for damage youve caused, so having the highest possible liability coverage levels is the best way to protect yourself.
What Additional Coverages Should I Consider
Rideshare insurance is a smart choice if you drive under a ridesharing platform like Uber or Lyft. Rideshare coverage fills the gaps between your personal insurance and any insurance provided by the ridesharing company so youre always protected, whether youre waiting for a ride request or dropping someone off. Learn more about how rideshare insurance works.
Gap insurance, also known as loan/lease payoff
If youre leasing or financing your vehicle, gap insurance may be right for you. This optional coverage pays the difference between what you owe on your vehicle and how much its worth. So, if your car gets totaled, youll receive the actual cash value of your vehicle, plus the additional amount you owe on it so you can pay off your loan or lease. Bear in mind, youll need comprehensive and collision coverage to add gap coverage. Learn more about gap insurance.
When choosing auto insurance coverages, always keep in mind how much you could afford to pay for injuries, damages, repairs, or even a new car. The right policy is rarely the cheapest one possible, but rather the cheapest one that gives you all the coverage you need to get peace of mind.
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How Much Will Be The Cost Of Property Damage Liability Insurance
There are two major factors that affect the property damage liability insurance cost:
Every insurance company has its own terms, conditions, and method of calculating the coverage cost. Insurance companies verify factors like the age of the driver, experience of the driver, car model, etc. Based on all these factors the company decides the insurance premium.
Also, the coverage limit you are selecting for the premium will affect your insurance cost. The higher the limit the higher will be the premium.
Here is the list of coverage limits along with the premium for property damage insurance coverage:
It is clear from the table that the difference of premium between coverage limit of $10,000 and $100,000 is around $20 per year only. The above prices are of a 2012 Hyundai the prices might vary as per the make and model of your car.
Does Property Damage Auto Insurance Have A Minimum
The minimum coverage for property damage depends on the state. It can be as little as $5,000 in some states and as much as $25,000 in other states. The more coverage you receive, the higher the premium you have to pay. Liability limits can reach up to $100,000 with the highest type of premium.
Depending on the car insurance company, there is little to no difference in the premium for property damage coverage. If you are the nervous type and prefer higher coverage for property damage, it will not break your wallet. It is good to have the coverage just in case, and it takes a load off of your mind.
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What Is Liability Coverage
Liability coverage pays for property damage and/or injuries to another person caused by an accident in which you’re at fault. This coverage is required by most states to legally drive your vehicle.
Liability coverage is broken down into 2 parts: property damage and bodily injury.
- Property damage coverage pays for damage to another person’s property
- Bodily injury coverage provides payment for others injured in an accident
We can help you get the coverage you need.
Consider Your Property Damage Liability Limits
You can usually opt to purchase limits higher than the minimum set by your state. For example, if you chose a $10,000 coverage limit and the amount of damage you cause exceeds that, you may have to pay the difference out of pocket. Having a higher limit of liability coverage may help you avoid having to pay out of pocket after an at-fault accident.
The higher you set your coverage limits, the higher your insurance premiums will likely be.
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Does Plpd Insurance Cover Theft
PLPD insurance does not cover theft, as this is considered damage that affects you, not another driver or owner of property you might have damaged with your vehicle. Instead, theft falls under what’s known as comprehensive insurance, which addresses any repairs to your car which might take place outside of a collision. That includes hail damage, falling trees, vandalism, and theft. However, even comprehensive insurance will not cover the items stored in your car when it was stolen.
While PLPD does not cover theft, it does provide coverage in the event of an accident. As a result. if you are involved in an accident, and especially if the accident is your fault, the premiums for your PLPD insurance will likely rise. That means it’s more important than ever to comparison shop for the best rates. Know what’s required in your state, and compare quotes from several insurance companies.
You need enough liability insurance to cover your net worth. Having coverage equal to the value of the assets you own and all the money you have, minus your debt, protects you financially in case of a serious car accident.
How Much Comprehensive Coverage Do I Need
Comprehensive coverage covers the types of damage to your car that can happen when itâs not being driven, including damage from extreme weather, falling objects, animals, flood, fire, vandalism, and theft. It goes hand-in-hand with collision coverage. Like collision, comprehensive insurance requires a deductible.
Many car insurance companies offer collision and comprehensive coverage together as a single add-on, though others allow you to choose one or the other. If you have a vehicle that is less than 10 years old or if you donât have enough cash on hand to repair or replace your car in case of an accident, you should get both comprehensive and collision coverage. Comprehensive coverage can also help repair or replace your car up to its actual cash value.
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Auto Insurance: Liability Coverage
Liability coverage protects you if you injure or kill someone or damage property.
Assume an accident for which you are clearly responsible: You run a red light, strike another car and injure the driver. Your liability coverage obliges the company to defend you in court, if necessary and pay claims to the other driver for vehicle damage and bodily injuries, including medical and hospital costs, rehabilitation, nursing care, and possibly lost income and money for pain and suffering.
Now assume that you’re involved in a collision at an intersection with no witnesses or evidence to pin the blame on either driver. Again, under your liability coverage, your insurer agrees to defend you against most proceedings the other driver may take against you.
datory in nearly all states . But state requirements are modest typically $20,000 to $30,000 for bodily injury suffered by one person in an accident, $50,000 for all people hurt in the same accident, and up to $25,000 for property damage resulting from that accident. Most people need much more liability coverage than the state’s required minimum.