Many people believe that liability only car insurance is a must for all drivers. This is not the case however. If you have one or more parking violations, a moving violation or any other type of traffic violation on your record, you should avoid liability only insurance. The reason is because liability only coverage does not pay for comprehensive or collision coverage. If you only have liability coverage and you get into an accident, you could be out of pocket and without protection.
The short answer is yes, liability only car insurance covers only accidents that involve your vehicle. Because different kinds of drivers each have different risks, it is important to know what kind of coverage you are receiving. Some policies will offer a certain level of liability when you first purchase them, but it may end up as a higher rate once you add in other types of coverage. Others will increase the limit once you have established a good driving record. Liability coverage is designed to pay for property damage or bodily injury caused by you or another driver.
Liability only coverage works best with vehicles that are financed through a bank or credit union. Auto financing companies do not provide bodily injury per person coverage, which is why liability only protection is the only way to go. With this coverage, your policy will pay for damage to another person’s car or person in the event that you cause a crash with your vehicle. Once you have established a good driving record, the cost of liability only coverage can continue to decrease. Plus, the limit for paying for damage or injury with bodily injury per person can increase at any time, unlike comprehensive and collision coverage limits.
Liability only coverage differs from liability auto insurance in that it doesn’t pay for the damages to your own car or medical bills if you are found at fault in an accident. If the other party is not covered by another car policy, liability only coverage will pay for the other party’s damages. Once you have established a good driving record, the insurance company may decrease the limit on your policy so long as you don’t become a repeat offender and have more than one accident within a short period of time. If you already have this type of coverage, your limit may be decreased if you have a history of making traffic violations or claims.
Liability only is usually purchased by drivers who only use their vehicle to occasionally pick up and drop off friends and family members. Most liability only policies do not include rental car costs or roadside assistance, which means you have to pay for these services on your own. If your vehicle is damaged in a wreck caused by you, the insurance company won’t cover the repair costs or pay for towing. This means that if you are found at fault in an accident, the other party may sue you, even if you are not at fault.
Collision coverage pays for repairs to your car after an accident. You are not covered for property damage, medical expenses, or for any damages resulting from a fire unless the collision occurs while you are carrying insurance that provides for these types of losses. For example, comprehensive coverage pays for damage to your car resulting from a collision with an insured object, as well as third-party liability coverage that pays for injuries to other people caused by your car. If you were not carrying liability insurance, you would need to purchase collision coverage to ensure that you’re protected in the event of an accident. In the event that your car is damaged in a wreck caused by you, your lender or the insurance company of the other driver may pay to repair your car and bring it back to its original condition.
There are some limits to liability and collision coverage. If you have enough coverage, you won’t have to worry about the costs of repairs, and you won’t have to purchase collision coverage if you don’t have enough coverage. If you decide to purchase collision coverage, make sure that your vehicle is repaired completely and that your deductible and maximum coverage is in compliance with state laws. This will allow you to be covered in the event of an accident regardless of what caused the accident.
Bodily injury coverage covers damage to another person’s body that was inflicted as a result of an accident. If your vehicle was damaged in a wreck, you will need to have bodily injury coverage to pay for the medical expenses and other costs associated with the injuries you inflicted on the other driver. Liability only car insurance policies do not usually provide for bodily injury coverage. You can add additional levels of bodily injury coverage as part of a liability only policy, however. This coverage would be required if you did not already carry auto insurance that contained bodily injury coverage. If you need additional coverage, check with your car insurance policy or a consumer reporting agency.