Liability Insurance: How does it work?

Are you thinking about getting liability insurance on your used car or truck? The question is do you fully understand what liability insurance is? What it covers? The video below is from 247 Insurance, it is very informative and I wanted to share it with you. Please watch this before you make a decision on liability insurance VS full coverage insurance. Keep in mind that if you are still making payments on your car or truck you will not even be eligible for liability insurance on your vehicle.

Liability coverage limits (that’s for the damage you do to others) are written as three numbers, such as 20/40/10. That translates to $20,000 in bodily injury coverage per person, $40,000 in bodily injury coverage per accident and $10,000 in property-damage coverage per accident.

States require certain levels of minimum liability insurance because it’s coverage that pays for damage you do to others — including bodily injury and property damage. It also pays for your legal bills if you cause an accident.

Bodily-injury liability applies to damages you cause to others. It covers their medical bills and lost wages. Property-damage liability pays to repair or replace property that you destroy. This includes other cars or property, such as fences. It can also pay for “pain and suffering” damages if someone sues you after a car accident — but only up to your liability limits.

However, your financial responsibility may exceed your liability limits. If you cause $65,000 worth of damage and have an insurance limit of $40,000, you’re responsible for the remaining $25,000 and could be sued for it. III recommends you carry $100,000 of bodily injury protection per person and $300,000 per accident. Other insurance industry experts also recommend buying a minimum of $50,000 in property damage liability coverage. –


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