Ask an Advisor

Your question will be broadcast to Advisors in your area.

Your question is too short

Are you sure you want to continue?

Something's missing

Ask a question to continue

How Liability for Auto Insurance Works

  • Corey
  • Oct 24, 2016

Liability for Bodily Injury

This is insurance coverage for those injured in a car accident and provides for medical expenses, lost wages, pain and vehicular damage. It also covers legal fees, should you be litigated and taken to court. Coverage is based either on a per person basis or a per accident basis, meaning your insurance will always have a cap on how much it is will to pay out in total for an accident, and how much they will pay per individual.

The minimum varies by state; anywhere from $20,000 to $500,000 per accident. When determining how much bodily injury insurance you wish to receive in the case of an accident, consider how much payout you need in order to protect your personal assets. If you were to injure someone in an accident when you are at-fault, the person could sue you, so your coverage should be high enough to protect your assets. For example, if someone is suing you for $40,000, but your coverage is only $20,000, they can take property assets like your home to cover the total. Most insurance experts recommend a policy of around $100,000 to $300,000.

Medical Coverage

If you are at-fault, liability insurance will not cover your injury-related expenses. This is especially important if you know your health insurance has high copayments.

If you had a passenger in the vehicle with you, and they do not have health insurance, liability insurance would still be able to cover their medical expenses.

Liability for Property Damage

If you were in an accident, it is likely your vehicle and/or another has suffered damage. Again, every state has a different minimum amount of coverage so confirm with your insurance broker on how much coverage you need.

Umbrella Liability

For those concerned with protecting their assets, you can purchase umbrella liability. This coverage provides an additional layer of protection for assets in the event you are sued and can be thought of as extra liability coverage that covers you above your maximum liability coverage. In regards to auto insurance, umbrella policies will coverage for all previously mentioned categories and protect your personal assets from being targeted.


*Disclaimer, rules and laws regarding insurance vary by state, and should consult with an insurance broker for the policy right for you and your family.



Advice, Car Insurance

Get Avenue on-the-go. Download the Free App now!