This is the only form of auto insurance required by nearly every state in our country with New Hampshire being the only exception. Virginia penalizes its residents a $500 annual fee per vehicle in the even they choose not to purchase this insurance. North Carolina, along with other states, requires drivers to have this insurance before they can be issued their driver’s license. Do you know what form of auto insurance this is?
That’s right, liability. Liability insurance pays for damage that a driver may cause to others. This includes medical and repair costs for each person involved.

If you cause an accident, or are found to be at fault in an accident or damage situation, liability insurance helps cover the expenses for which you are held responsible. These expenses can add up quickly, as they include not only damage to other vehicles but to people and property as well.

Each liability insurance policy is broken down into three types of coverage:

1. bodily injury coverage per person involved;
2. bodily injury coverage per incident; and
3. property damage coverage.

Liability auto insurance policies are written as three numbers, with each protection type represented. For example, a 25/35/15 policy would mean that it covered $25,000 in bodily injury coverage (per person), $35,000 in bodily injury coverage (per incident) and $15,000 in property-damage coverage (per incident).

Bodily Injury Liability Coverage- For accidents where you are at fault and someone has been injured, bodily injury coverage helps protect you from expenses such as emergency aid, medical services, loss of compensation (if the injured party is unable to work due to injuries received in the accident), legal fees, funeral costs and other such expenses.

Property Damage Liability Coverage- For accidents that include damage to property such as homes, buildings or vehicles, property damage coverage will help cover these costs. Property damage liability coverage many times covers not only replacement costs, but repair costs as well.

While many expenses due to an accident are covered (as listed above), the amount you are financially responsible for may still exceed your liability coverage limits. It is recommended that you look at all coverage options available from a variety of providers and choose the highest limit that your budget comfortably allows for.

State laws determine the minimum amount of liability insurance that you must carry, but you can add as much coverage to your policy as you are able and willing to pay for. By adding additional coverage you can not only reduce the out-of-pocket expenses associated with an accident, but many companies are also offer “extras” that can be added. These extras include things like rental car reimbursement, and towing/labor fee coverage.