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What is Auto Liability Coverage?

Article Details
  • Written By: C. Daw
  • Edited By: O. Wallace
  • Last Modified Date: 20 March 2019
  • Copyright Protected:
    2003-2019
    Conjecture Corporation
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Auto liability coverage insurance is offered by most car insurance companies and it is a requirement in most areas that it be active. Liability insurance is the required minimum amount of insurance that must be held by all drivers in case of an accident. There are policies that offer higher limits than what local requirements may be, but the actual definition of liability insurance is the lowest allowable minimum requirement set by local laws. Auto liability coverage basically covers the damage done to the personal property of another driver when an accident happens, as well as medical injuries that may occur from the mishap.

This type of auto insurance was designed to ensure that all drivers are safe from financial disaster in case an accident should occur. Medical bills and property damage can be extensive sometimes, and the average person cannot afford to pay for such expenses out of pocket. Auto liability coverage offers payments to the other vehicle's occupants to cover the medical expenses and the cost of repairs to the vehicle. The down side of this type of insurance is that it does not cover the expenses of the person that holds the insurance, which is why local laws and regulations demand that every driver has at least the required minimum amounts.

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Most auto liability coverage policies are broken down into three separate sections, and each policy will list a series of three numbers that represent the amount of coverage for each area. The first number represents how much of the payments will be applied to bodily injury of the occupants in the other car or cars that were involved in the accident. The second number is the maximum amount that will be paid out for all the services required. The third number represents the amount of money that will be paid out for expenses to the personal property of the other driver or drivers.

Auto liability coverage is a standard of set minimum amounts of insurance coverage that each individual driver must have in order to ensure that expense are covered in the case of an accident. Since this type of insurance only covers the occupants of the car involved that is not the policy holder, laws and regulations in most areas demand that all licensed drivers carry a set amount of liability insurance. The set minimum amounts required vary from area to area, so in order to be a legal driver, local requirements need to be investigated. The areas that do not require a set amount recommend that all drivers carry auto liability insurance though, because it prevents individuals and families from falling into financial trouble when an accident does occur.

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