When choosing an auto insurance policy, it’s typically easiest to go with whatever’s the cheapest available. However, it’s important that drivers find a policy with the coverage they need at an affordable rate. Typically, liability auto insurance policies are the most budget-friendly, but carrying that type of policy comes with financial risks. Let’s review what liability auto insurance is and what risks come with carrying this type of policy.
What is liability auto insurance?
This type of insurance policy covers damage you cause to another vehicle and/or driver and does not cover any damage you or your vehicle may have sustained if you’re found at fault for an accident. Liability coverage consists of two components: bodily injury liability and property damage liability.
Bodily injury coverage pays for the cost of another person’s injuries if you’re at fault up to your policy limits. You’ll typically see this displayed on your auto insurance declarations page broken down into two numbers:
- The maximum amount paid per person in an accident (average is $30,000)
- The maximum amount paid for one accident (average is $60,000)
Property damage liability coverage pays for damage to other cars or property (ex. fence) if you’re found liable. Typically, the average policy offers $25,000 in property damage coverage per accident, but your declarations page will specify your coverage amount.
Remember, none of the coverages listed above pays for you or your vehicle if you carry a liability auto insurance policy. (Which we do not recommend at all.) if you opt not to carry coverage at all (which is illegal in some states), then you’ll be on the hook financially for any accidents or injuries you’re found liable for.
Will a liability policy cover other damages?
Other things can cause damage to your car outside of an accident, such as hail, flooding, debris, etc. With a liability insurance policy, you won’t have any coverage for such events and will be financially responsible for any repairs needed.
When is a liability auto insurance policy a good idea?
Liability auto insurance policies are not a bad policy to carry; they’re ideal for those who own a car with low value or if you own your vehicle outright. If you’re unsure whether to get a full coverage policy over liability, you’ll first need to calculate your car’s worth. This is usually estimated on your vehicle’s age, mileage, and general condition. You can use Kelly Blue Book as a resource to help you get the best estimate but keep in mind insurers have their methodology of determining value.
If your vehicle’s value is below the cost of a full coverage policy, then a liability policy may be your best bet. But, if your vehicle’s worth exceeds it, then you’ll need more than just liability coverage.
In summary, if you carry a liability only auto insurance policy, you’re at risk for:
- Not being covered for any damage your vehicle sustains if you’re responsible for an accident
- Not having any coverage for any injuries you sustain if you’re liable for an accident
- No coverage if your car gets damaged due to hail, wind, debris, or other events
Carrying a liability policy leaves you open to financial risks you otherwise wouldn’t have with a comprehensive auto policy.
Get affordable car insurance with TGS Insurance
Auto insurance is a necessity for all drivers but determining what coverage and how much you need isn’t always as cut and dry as one would hope. Sometimes you may be overinsured or underinsured, paying too much for auto insurance, and it can all be confusing, but we’re here to help.
At TGS Insurance, our team of experts will craft you the perfect auto insurance policy that considers the coverage you need and what works best for you. We’ll shop your policy through our bank of 35+ A-rated (or better) carriers to find you the best policy the market has to offer. Whether you need the state’s minimum requirement or a full-encompassing policy that protects you again absolutely anything– we’ve got you covered.
Get your hassle-free auto insurance quote today and see why over 15,000 Texans trust TGS Insurance for all of their insurance needs!