Car Insurance - Understanding Liability Coverage
Understanding how liability coverage works will help you make an informed decision when taking out your car insurance policy, which will save you a lot of money and aggravation in the future.
Liability insurance essentially covers any costs associated with your legal defense and other expenses incurred as a result of a car accident, which cause the injury of any of the parties involved.
One of the most common issues when it comes to liability is that often people tend to either buy too little coverage or the limits they set are inconsistent.
For example, they set a higher limit on their house than they do their car, which proves how little thought people give this issue.
Compare the probability of someone seriously injuring themselves in your home versus you being involved in a car accident and you will better understand why you need to take out a car insurance policy that gives you a high level of liability coverage.
The injured party in a car accident will often be awarded medical expenses incurred as a result of the injury, pain and suffering, as well as lost wages for the period he is recovering.
The amount all depends on what the person does for a living, ergo their yearly income.
Therefore, if you hit a banker then you could end up owing at the very least $250,000 just for lost wages, let alone medical bills or pain and suffering.
Your car insurance policy will cover whatever the limit you set and you will have to come up with the balance.
So if you decided to take out liability of $100,000 on your car but have $300,000 on your home, then you may have a serious problem as you will have to cover the remaining $150,000.
Liability insurance essentially covers any costs associated with your legal defense and other expenses incurred as a result of a car accident, which cause the injury of any of the parties involved.
One of the most common issues when it comes to liability is that often people tend to either buy too little coverage or the limits they set are inconsistent.
For example, they set a higher limit on their house than they do their car, which proves how little thought people give this issue.
Compare the probability of someone seriously injuring themselves in your home versus you being involved in a car accident and you will better understand why you need to take out a car insurance policy that gives you a high level of liability coverage.
The injured party in a car accident will often be awarded medical expenses incurred as a result of the injury, pain and suffering, as well as lost wages for the period he is recovering.
The amount all depends on what the person does for a living, ergo their yearly income.
Therefore, if you hit a banker then you could end up owing at the very least $250,000 just for lost wages, let alone medical bills or pain and suffering.
Your car insurance policy will cover whatever the limit you set and you will have to come up with the balance.
So if you decided to take out liability of $100,000 on your car but have $300,000 on your home, then you may have a serious problem as you will have to cover the remaining $150,000.
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