Give Yourself an Insurance Checkup-What is Liability Coverage?

Granted I do only review Georgia car insurance policies for people when things have gone wrong but isn’t that the way you should approach your insurance purchasing? The most common thing I hear from people after they have been in a terrible accident is “I have full coverage.” What does that mean?

In the insurance industry, it can mean very little. Many insurance agents will tell you that you have “full coverage” and what that really means is you have liability insurance, collision coverage and comprehensive coverage. It has nothing to do with the amount of the these coverages. I have to break this news to people all too frequently.

So… First step is to get out your policy information. Every six months or so you should receive a declarations page. If you cannot find it, pull up your insurance account. Almost everyone has their policy documents available online these days.

The declarations page should list the types of coverages you have and the dollar amounts of those coverages.

The first one is usually “Liability/Bodily Injury” This is one of the most important coverages. If you collide with someone or something and a person is injured, this coverage steps up to protect you. Lets assume that number is $50,000.00. That means that if you hit Steve and Betty Smith and they get hurt and have medical expenses, your insurance company will do two things if a claim is made. 1) the Insurer will pay the Smiths up to that dollar amount for the claim (if the insurer determines the claim is worth that much). 2. The Insurer will provide you with a free lawyer under the “duty to defend.”

Here is an example from a recent case we handled as Savannah injury lawyers; You hit the Smiths and break their legs. Under a policy that lists $50,000/$100,000.00 the policy would pay up to $50,000.00 to each of them if appropriate. If they had smaller injuries, the dollar amounts would be more appropriate to the injury.

Liability Property Damage
The next coverage protects you for damage you cause to other property. It could be from hitting your neighbors fence or running into their car. Your policy will investigate and appraise the damage and pay the appropriate amount for the damage you caused up to your limits.

To recap, Liability coverage is to protect you from other people that come after you when you allegedly harm a person or property on accident. I suggest that you carry a minimum of $100,000.00 in liability coverages per person. Please note that there is no coverage for you if you do it on purpose.