Understanding Liability Car Insurance

In every state in the United States liability car insurance is a requirement of law. Drivers are required to carry liability insurance of at least a minimum amount in order to be in compliance with these laws and stiff penalties exist for those that fail to meet the requirements. It is important to know the laws and requirements of your state and be sure that you are carrying at least the minimum amount of insurance that you are required by those laws and regulations.

The minimum coverage in liability car insurance is usually defined in a three part ratio like 20/40/10. The numbers in this ratio indicate the amounts of insurance coverage for personal injury and property damage resulting from an automobile accident that you cause. In the example above the ratio indicates a liability insurance policy that covers up to a total of forty thousand dollars in personal injuries but is limited to a maximum of twenty thousand dollars per person injured. This portion of the insurance coverage is called personal injury protection or PIP. The last number indicates insurance coverage up to a total of ten thousand dollars for property damage. Insurers refer to this portion of a liability policy as property damage liability coverage.

State insurance laws will have requirements set for the minimum amount of coverage a person needs to carry on his or her car. In many cases these minimums are somewhat unrealistic, however, and it is usually recommended that drivers purchase greater levels of coverage from their insurance companies, as they may be sued for any damages not covered by their insurance. It is also important to remember that liability coverage of these types pays only if you caused the accident. If you are involved in an accident in which another party is at fault you are relying on the other party’s insurance coverage, if they have any at all. It is for this reason that many states also require uninsured/underinsured motorist insurance coverage that will protect you in a case like this. For obvious reasons it is a good idea to purchase and carry this insurance coverage even if it is not required by the laws of your state.

Covering your car against other, non accident related, problems is also up to you. Liability coverage does nothing for you if your vehicle is stolen or vandalized, for example.