Liability coverage protects you from lawsuits in the event you are involved in an accident. This coverage provides protection even if you are driving another person’s vehicle. There are three main types of Liability coverage:
Bodily Injury coverage is typically sold as split limits, a limit for each passenger and an overall limit for the accident. For example, if you elect to purchase $100,0000/$300,000 coverage, you have the following coverage maximum payouts in the event of an accident:
$100,000 maximum payment to any individual involved in the accident
$300,000 maximum payment for all individuals involved in the accident.
The minimum limits for BI vary by state and it is suggested that you purchase $100,000/$300,000 unless you are a non-standard driver that has very expensive insurance rates. Always check with your insurance agent about the risks associated with purchasing lower or minimum liability limits.
Medical or Personal Injury Protection(PIP)
This coverage provides protection for medical and/or funeral costs for you in the event of an accident. States are either Medical states or PIP states depending on their state law. Please check with your agent for a complete description on medical coverage and its relation to other existing health/life coverage you may have.
As the name implies, property damage protects you from any damage resulting to a person’s car, or other property in the event of an accident. For example, if you purchase $100,000 of Property Damage, the maximum amount paid for damage to other individual’s property would be $100,000 for the accident.
Uninsured Motorist provides coverage for you in the event the other driver does not have insurance at all. Underinsured Motorist provides liability coverage for you in the event the other driver does not have enough insurance coverage.