Bodily injury liability insurance does not directly cover you or your automobile, but it does cover the other person in the collision if you cause a car accident that causes harm to other drivers. It protects you against claims by the injured person, such as healthcare expenses, loss of salary, suffering and, in some cases, legal fees, to receive compensation after injury. What is covered differs from one state to the next and from one policy to the next.

Prospective buyers should follow the rule of thumb of purchasing the largest bodily injury liability policy limit they can afford. If your coverage is insufficient to cover all injury-related costs in an accident you caused, you may face lawsuits for the balance of what you owe, placing financial assets (such as your home) at risk.

Property damage liability Insurance

Property damage liability coverage compensates you for any harm you cause to another person's property. This sort of liability insurance does not provide coverage for your own vehicle. To acquire coverage for your own car, you must get collision or comprehensive coverage.

The liability insurance for property damage typically covers the repair/replacement of the vehicles, houses, buildings, lamps and telephone poles of another person. The particular categories of property that are covered vary depending on your policy and coverage amount, so be sure to read the contract carefully or consult with your insurance representative.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage immediately protects you. Uninsured motorist coverage may actually cover damages to your own car or injuries you suffered unlike the two other sections of the conventional liability policy.

If someone crashes into you, hits you, or you are injured in a hit-and-run and there is no accountable party to make a claim, this policy will pay for your medical expenses. This sort of liability insurance replaces the insurance that the other motorist should have had but did not.

Underinsured motorist policy, like uninsured motorist coverage, protects you directly, except when the other driver has coverage but not enough to meet the responsibility cost caused by the harm you experienced. Underinsured motorist coverage provides you an additional sum up to the policy limitations you selected.

Including non-insured and under-insured carriers such as traditional liability insurance, body injury and loss of property, and is sometimes known as uninsured/underinsured motorist bodily injury coverage (UMBI) and uninsured/underinsured motorist property damage coverage (UMPD) (UMPD).

Since people drive without insurance, certain jurisdictions require drivers to cover cars without insurance, if not un-insured and under-insured cars. Even if it isn't required by law, you should consider adding this valuable coverage to your vehicle insurance policy to avoid paying out-of-pocket charges if you are involved in an accident with an uninsured or underinsured motorist.

Liability coverage is marketed with three liability scenarios in mind: the maximum amount needed to cover a single person's injuries, the maximum amount needed to cover several people's injuries, and the maximum amount you believe you'll need to cover the entire property damage in an accident. They are usually shown as three numbers separated by slashes, so if you get liability coverage that looks like 50/200/50, that means you have coverage for:

Per individual, bodily injury liability is limited at $50,000.

Total bodily injury liability per accident is $200,000

Property damage liability of $50,000 per accident

If you don't think you can pay a large medical cost, it's typically recommended that you spend extra on liability insurance, and many states require liability coverage ranging from $25,000 to $50,000. It's critical to consider how much money you can afford to pay out of pocket if you get into an accident.

And, while state minimums normally cover minor fender benders, accidents involving major property damage, injuries, or even fatalities may end up being too expensive for you to cover the rest on your own after the minimum is paid out.

Property damage is indeterminable, and it is often difficult to put a figure on this type of coverage, so make sure you plan ahead of time and consider every possibility when determining your policy's maximum. Make sure to acquire the level of coverage that you are comfortable with and find cheap.

There is no need to determine who was wrong in "no fault" countries in claims of injury to be compensated. No-fault liability auto insurance, which is now required in 12 states, compels each party to submit a claim with their individual insurer, which limits litigation but predictably raises problems of fairness, as irresponsible drivers are frequently said to get off “scot-free.” While no-fault states do not totally remove the possibility of faulty drivers being sued, they do limit the conditions in which they can be sued.

No-fault state:

Florida

Minnesota

Hawaii

New Jersey

Kansas

New York

Kentucky

North Dakota

Massachusetts

Pennsylvania

Michigan

Utah

If the accident resulted in a lawsuit, residual bodily injury liability coverage supplements the financial safeguards provided by no-fault insurance. Individuals or businesses with a basic no-fault coverage might expect their insurer to pay personal injury protection claims for injuries, damages, or accident-related lawsuit cost (PIP). However, this has limitations and will not protect against lawsuits or incidents that surpass their threshold. Residual liability insurance provides additional protection in the event that an accident affects numerous people and causes multiple injuries or death.

If you don't own a car, you'll need liability insurance.

If you desire coverage for vehicular liability but do not own a car, you have a few possibilities aside from the extra liability coverage provided by a rental car provider.

Non-owner Auto Insurance

This form of coverage is useful if you frequently drive other people's automobiles but do not own your own. It mainly includes liability — physical injustice and property damages — and is also fairly limited since insurer/uninsured motorist coverage is not always available on non-owner vehicle insurance insurance policies (covers medicinal expenses incurred as a result of an accident caused by you).

The car owner's auto insurance policy will normally cover you while driving their vehicle — even if they aren't with you — but only up to a specific amount, so if you get into a major accident and the damage exceeds what their policy would pay out, the balance may be on you. Non-owner automobile insurance operates as an extension of the car owner's current policy, covering the remainder if the accident expenses are considerable. If you rent for a week or more a year, it's also a good idea to purchase non-owner liability insurance. Supplemental liability insurance provided by rental automobiles is frequently more expensive and provides less protection than non-owner automobile insurance.

Non-owner liability automobile insurance is probably not required if you borrow cars only a few times a year for a day or two at a time. The effort of taking out an entire insurance and paying premiums throughout the year is simply not worth it.

If you reside with someone, whether a family member or a roommate, and frequently borrow their automobile, you should request to be added to their auto insurance policy. This is normally a quick and simple process. In fact, many insurers require that all licensed drivers in a household be covered by a policy.

Most vehicle insurance policies cover rental cars, but you should check with your insurance carrier to see if the coverage is adequate or if you should add on to your current policy if you will be renting cars frequently or for lengthy periods of time. If you're unfamiliar with a car you're renting, or if someone on your policy is renting a car, you could feel better at ease raising the liability limit, because being unfamiliar with a car puts you or a family member at a higher risk of an accident. Rental car companies are required by law to carry a state's minimum amount of liability insurance coverage on their vehicles, so they provide their own liability insurance for a small per-day cost to cover damage to someone else's automobile and/or its passengers in an accident. It's marketed as supplemental liability insurance (SLI), and it costs roughly $8 to $12 per day. If you rent a car and do not have auto insurance, it is highly recommended that you purchase SLI.