With ever increasing numbers of drivers on the roads and accidents at an all-time high, insurance companies are responding with soaring rates for liability insurance coverage. In an attempt to cut costs you may be wondering if you need car liability insurance. After all, the rates for your comprehensive coverage alone are staggering ─ do you really need both?
The answer to this question is a simple one. Virtually every state in the country requires liability insurance. It’s the law and you don’t want to get caught breaking it.
Liability insurance coverage protects you in an accident against injuries and damages you cause to someone else. Liability insurance covers damage to their car, their person, property, such as other cars or fences you run into and a myriad of other accident ills.
Car liability insurance policies are governed by limits. A limit represents the total amount of money the policy will pay to cover your injured parties. If the injuries or destruction of personal property exceeds your coverage limits, you are responsible for the difference.
In addition to medical expenses for bodily injury, liability coverage on your car can also cover things like emergency aid at the scene, compensation for loss of income, funeral expenses, legal defense fees and more.
There are two kinds of car liability insurance. Combined Single Limit policies protect against damage to property and bodily injury in one policy. Split Limit policies separate the coverage into two policies. The bodily injury coverage is sometimes split also. You can obtain coverage on the basis of a maximum payment per person or maximum payment per accident.
As is the case with any insurance, the higher the limits on your liability policy, the higher will be your premiums. A good rule of thumb is to purchase as much liability insurance for your car as your budget will allow. Remember, if you’re at fault in an accident, you could be legally responsible for all medical and property costs for everyone involved. Having adequate insurance can protect you from the potentially devastating effects of an accident.
Now that you know how important it is to have liability insurance for your car, you must determine how much coverage you need. Liability coverage limits are displayed in the following sample format: 30/60/30. These numbers translate to $30,000 in bodily injury coverage per person, with a maximum of $60,000 total in bodily injury coverage per accident and $30,000 in property damage coverage per accident. Your state may require 25/50/25 or some other limits; your insurance agent will advise you of your state’s requirements.
There are several factors that determine the cost of liability insurance for your car. If you live in an area with a high rate of accidents or in an urban area where more accidents occur than in a rural area, your premiums will be affected. How often you drive will be a factor; the more you drive, the more likely you are to become involved in an accident. The same is true of the distance you drive to work. On the other hand, if you drive your car mostly on the weekends or to run errands during the week, your premiums should be lower than those of someone who commutes to work each day.
The last thing that will probably affect your premium relates to who you are. The factors that are considered are your age, marital status and driving record. Accident rates are higher for drivers under the age of 25, for young males and for single males. It goes without saying that drivers with a high number of traffic violations will also pay more.
You can easily obtain liability insurance rates for your car online at any number of websites. Here are two: www.goinsurancerates.com/auto-insurance, www.carinsurancerates.com.
Some websites also provide the capability to compare rates between insurance companies. The following comparison was run at HelpInsure.com, a Texas firm. The following criteria were used:
Limits: 50/100/50
Driving pattern: To and from work
Driving record: No driving violations
Credit rating: Average
Age: 25-65
Sex: Female
Married/Single: Married
The table below illustrates the quotes received.
Company Name Annual Sample Rate
ALLSTATE (COUNTY MUTUAL) $838
ALLSTATE (FIRE AND CASUALTY) $310
GEICO $493
HARTFORD (CASUALTY GENERAL) $516
HARTFORD (FIRE GENERAL) $323
STATE FARM OF TEXAS $573
STATE FARM MUTUAL AUTOMOBILE $491
Whatever your financial situation, know that the law requires you to carry car liability insurance. What’s more, it’s in your best interest to do so.
Tags: bodily injury liability, bodily injury liability coverage, injury coverage, insurance companies, liability insurance coverage, liability policy
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