Auto Liability Coverage

This coverage that protects you against any lawsuit because of a car accident.

Automobile Liability Coverage Features:

- Third Party Coverage

- Fault based

- No Deductible Applies (unless you have a commercial policy)

- Limits on amount of coverage

This coverage is required by law. You must be able to provide proof of insurance when the police ask you. They are looking for this coverage. All states have minimum requirements on Liability Coverage limits that must be met.

For example, Washington State insurance carrier must provide a minimum liability limit of $25,000. So that is the least amount of limits that you can have. Other states vary. (see our state specific page for more information).

This section of the policy covers you (the policyholder) and/or the driver (sometimes they are different people) for being liable (being at fault) to a third party in a vehicle accident. Yes, the driver of your car or you the policy holder must be at fault. To see how insurance companies determine fault go to our section �Determining Fault�.

The only exception or restriction to this is if you get in an accident in a no Fault State (Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah) to which special restrictions and regulations apply.

You can be liable to a third party by

1. damaging someone else�s property or

2. by injuring someone else.

You must keep in mind that Liability Coverage covers third party damages (a claimant�s damages) not your own. Therefore, if you drive a Ford and they drive a Chevy, this coverage will only cover the Chevy damages. You will have to fix the Ford on your own if you do not have any other coverage (collision). In the accident below you will see how 1 and 2 can happen at once!

But, what is really covered under Liability Coverage? Well, you are covered against fault. This means that you are being shielded from potentially being suit for damages that you cost some else (you cannot be liable to yourself). In other words, you are being protected for any and all claims that a third party can bring against you. Therefore, if you pay for Liability Coverage,it is the job of your insurance carrier to protect you against litigation. How do they do this?

The carrier will negotiate and pay the claimant (the third party) for the property damage (fix their car, pay their towing charges, pay for the rental car, and any other expense they would not have if the accident did not occurred). Then they will also pay for their medical bills, know as special damages, and for their pain and suffering, known as General Damages.

General damages are the most litigated today, why? How much does your headache cost? That is why, it is very subjective to determine an actual number when evaluating pain.

Your insurance company under Liability Coverage will pay fairly easily for the property damage you caused. Why do I say fairly easily? Well, these damages can be accounted for (a rental car cost $30 dollars per day, and it took ten days to fix the car, therefore they owe $300), same with the price of fixing a car (what did the body shop charge?).

This is straightforward. However, life often times is more complicated than that. Some damages like hitting an antique vehicle are hard to calculate, some old cars gain value with time, while most cars lose value with time. If you are looking at a total loss situation then the process can be more complicated (see: Property Damage Claim -- Total loss).

To read more about Liability Coverage, go to Page II.
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