If you are found to be at fault in causing a car accident, personal liability coverage provides protection for you in the areas of bodily injury and property damage. Bodily injury coverage provides you with protection against the financial and other consequences of injuries which you cause to others, up to the maximum amount of coverage you have chosen, including:
Bodily injury coverage typically extends to any person driving your car with your consent. It may also apply if you or one of your immediate family members causes an accident while driving another person’s car with their consent.
If you are found to be at fault in causing an accident, property damage liability coverage pays for the repair or replacement of the damaged property, as well as your legal costs associated with the defense of any lawsuits related to the accident, up to the maximum level of coverage you have chosen. That property includes any other car involved in the accident, and any non-vehicle, personal property such as a fence or a garage. This coverage also applies to anyone else driving your car with your consent.
Personal liability coverage is the most important part of an auto insurance policy. The reason for this is that the potential magnitude of losses due to car crashes, and the resulting potential damages awarded against you, are so great that they could wipe out everything you own, and even take a big slice of your future earnings as well. That’s why it is imperative that you have adequate levels of personal liability coverage, which means taking more than you think you need. And the rates are so reasonable that you can probably afford the maximum amount.
Problem is, even if you take the maximum level of personal liability coverage which your insurance company allows, that level would in all probability be grossly inadequate. That’s why we recommend to our customers that they take out umbrella insurance in addition to a regular auto insurance policy. Not only will it provide you with much-needed top up coverage, it will provide you with protection for losses which are not covered by your auto policy at all.
Finally, it is important to be aware of the difference between single and split limits personal liability coverage. The former provides a single, overall limit for personal liability, while the latter splits the coverage into three component parts, and poses a significant danger to the unwary.