We all make mistakes. Sometimes those mistakes result in damage to others’ property — or to people.
While paying for your mistakes is a part of life, you don’t want a mistake to cost you everything. This is why it’s important to make sure that you have liability coverage in your auto insurance policy. Liability insurance pays out when your mistake ends up causing damage to someone else’s property or person.
When you have adequate liability coverage, your assets are depleted when you are asked to cover the costs related to restoring damaged property or paying for someone’s medical expenses. It also helps ensure that you have the financial ability to step up and take care of someone that you accidently hurt.
Types of Liability Coverage
There are two main types of liability coverage:
Bodily Injury: This type of coverage takes care of bills that can include medical expenses for the injured party, emergency aid administered at the scene of the car accident, compensation for loss of income due to injuries, pain and suffering, and funeral expenses if the injuries result in death.
Property Damage: This type of liability coverage comes into effect if you damage someone else’s property in an accident. This includes the repair of structural damage to buildings (homes, storefronts), as well as the repair or replacement cost of other stationary objects. Property damage coverage also includes the cost of repairing or replacing a car.
It’s important to note that your liability coverage can also cover the cost of legal defense fees and bail bonds those listed on your policy. So, if you find yourself in need of an attorney to help in your defense when someone sues you, liability coverage can provide for those costs.
Realize, though, that in many cases your insurance company will appoint you one of their own lawyers. This lawyer will represent you if you are sued as a result of what happens with a car accident. Find out if your policy will cover the costs associated with hiring your own lawyer. While the insurance company’s lawyer can clear things up for you and is technically working for you, it’s important to realize that he or she is probably on the insurance company’s standard list of attorneys and may be hesitant to do anything that is not in the insurance company’s best interest.. If you are concerned, and want someone in your corner, you might have to hire your own attorney.
Do You Need Liability Coverage?
All 50 states require drivers to have some degree of liability coverage, so you will need to purchase insurance. While it might seem unfair, remember that liability coverage can help you be responsible for your mistakes and can prevent you from paying out a large sum if you are found responsible for a car accident. Your insurance company takes care of those costs.
The amount of liability coverage you are required to have is determined by state law. Your insurance agent can help you understand this coverage. In general, your bodily injury coverage is divided out by offering a maximum amount paid for each person injured, and a maximum for each accident. So you might have coverage of $50,000 for each person, but a cap of $100,000 per accident. If you are in an accident that injures three people, and each person has $40,000 in costs, the total, $120,000, is beyond the per-accident maximum. You will have to come up with the extra $20,000 on your own. (But it’s better than paying the entire $120,000 without help.)
In Nevada, our minimum coverage is $15,000 per injured person with a maximum of $30,000 per accident. Find out what your state’s required minimum coverage amounts are for bodily injury, as well as for property damage. In many cases, the minimum coverage requirements are rather small. It is my opinion that purchasing a minimum policy doesn’t really protect you or others. I have seen injuries where the first day in the hospital cost more than $15,000. A minimum policy simply is not enough. I would suggest getting at least $50,000 of insurance, if you can afford it. More would be better.
In exchange for your regular, often manageable, auto insurance premium, you can receive protection against the mistakes you make — including help paying for legal fees should you need professional and knowledgeable representation.
Ryan Anderson is a founding partner of the law firm Morris Anderson, one of the leading personal injury firms in Las Vegas, Nevada. He has resolved hundreds of cases and obtained millions of dollars for his clients. Circle Ryan on Google+!