Liability Auto Insurance Coverage

Organizations that Offer Discounts on Auto Insurance

There are two different types of liability car insurance, each covering different areas of damage.

• Bodily Injury Liability

  Bodily Injury Liability (BI) pays for any damages due to the bodily injuries of others when the insured person is considered to be “at-fault” in an accident (or considered to have caused the accident).

  

• Property Damage Liability

  Property Damage Liability (PD) covers damage to another party’s property sustained during an accident caused by the insured person.

  

Generally, three amounts will be quoted in a liability only coverage policy, such as ’20/30/10.’ The first two amounts refer to bodily injury (BI) liability limits, while the last number refers to the property damage (PD) liability limit. To clarify, the number 20 means that $20,000 will be paid for each person injured in the accident, while 30 indicates that $30,000 is the maximum which will be covered for the entire accident overall, and 10 means that $10,000 will be paid for any property damage caused by the accident.

Are there other types of coverage required in addition to liability only auto insurance?

States vary considerably in their required minimum amount of liability coverage. In addition to basic liability coverage, some states may also require uninsured motorist insurance and/or no-fault insurance (also known as PIP, or personal injury protection).

No-fault/PIP assists with the payment of certain hospital, medical, funeral or other types of expenses you incur as the result of an accident. It also covers any other passengers in your vehicle at the time of the accident as well as anyone outside the vehicle, such as pedestrians, who may have been injured.

Uninsured motorist coverage helps cover damages when the person at-fault for the accident is either uninsured or cannot be identified. In these cases, uninsured motorist coverage helps pay for bodily injury costs and possible property damage sustained by yourself or others in your vehicle during an accident. It may also help pay for expenses when the person at-fault has insufficient insurance to cover your claim completely.

You should check with your state to find out what exactly is required before you decide on a policy.

Cancellation and/or Non-Renewal Restrictions

States vary on cancellation and non-renewal restrictions as well. In some states, insurance companies must adhere to certain guidelines in order to cancel or non-renew an insurance policy.

For example, in Indiana, if your insurance policy has already been in effect for 60 days, the insurance company cannot cancel it outside of a few specific reasons (including failure to pay your premium or losing your license to drive).

Once you reach the end of your policy, the insurance company may refuse to renew it, but they must give you at least 20 days advance notice.

State-by-state Minimum Liability Requirements

As previously stated, states vary on their minimum liability insurance coverage requirements. Below are the minimum liability limits per state based on the most current information available at the time of this writing. You should contact local insurance agencies to confirm these are accurate before purchasing your policy.

Liability insurance is the bare minimum required to cover damages if you are at fault in an accident. Often, it is not much more each month to get more comprehensive coverage, which may be worth it for peace of mind, financial responsibility and other reasons.