Liability coverage is specifically for bodily injury, such as when an insured driver is responsible for inflicting bodily harm, injuries, and even death of a third party. Take note that liability coverage does not cover harm that may come on you or your own passenger, given that you are the driver responsible for the harm. Liability coverage is only responsible for the third party’s welfare. Liability coverage also covers property damages, such as when the insured driver runs over a fence, lamp post, etc., thereby inflicting damages on these properties. Of course, it also means covering damages inflicted on the third party’s vehicle.
Liability coverage is available in two forms of policies. The first is the Combined Single Limit policy. This policy combines the coverage for property damages and bodily harm under a single limit. What is positive about this is its convenience; especially in cases when a driver inflicts bodily harm to a third party, and damage some property both at the same time. All these damages and injuries for which the insured driver is responsible for would be paid under the Combined Single Limit policy.
The second policy under Liability coverage is the Split Limit policy. It is the opposite of the Combined Single Limit policy because it splits the coverage into two respective entities—property damage coverage and bodily injury coverage. Furthermore, bodily injury is split into what we call maximum payment per person and maximum payment per accident. To put it simply, the company will pay for bodily injuries inflicted by the insured driver/owner, but only to a specific maximum amount.
What drivers must keep in mind when availing Liability Coverage is that choosing low limits may cause financial burdens in the event that the owner causes damages amounting to more than the actual limit. It is therefore better to choose limits at a reasonable amount, based on the assessment of specific driving abilities and probabilities of accident involvement.
Because Liability Coverage is the most required in the states, it is usually priced at a relatively reasonable amount. As for the reason why this type of coverage is the usual required type, it is simply to ensure safety for other people and to induce responsibility in the driver.
Based on this information, always remember that coverage actually determines your security, as well as the financial support that you may have in case that you are to be involved in accidents. Therefore, always choose the best coverage according to your needs.