What Is Liability Insurance Anyway?

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As usual, there are fancy industry words that the average person is oblivious to unless they are involved with lawyers and the lawyers who lawyer. So, let us make it really clear for you: Liability insurance is what covers you financially when you are responsible for an accident and the damages associated with it. Clear enough?

But bear this in mind: It doesn't cover you or your car.

The laws requiring car liability insurance be carried by every driver is meant to protect not you but every other driver out there that you might hit with your car. So, think about that for a second: If all you have is the legal minimum - liability insurance on your car - then the only accident that you are covered for, in a way, is one caused by someone else. Yes, if you cause the accident then the insurer will pay the other party in the accident that you caused. So, you are not out of pocket for those damages (unless the level of coverage is exceeded by the medical and property damages you've caused). BUT, you are totally on the hook for your own injuries and the damage to your car, which could be extensive. (Ever checked into the cost of repairing even a deployed airbag? Whew!)

Two Sides to Consider

But that being said, car liability insurance isn't just one thing. There are actually two sides to these policies:

Is This Enough Coverage?

So, now you know what this type of protection includes. And, hopefully, we've sobered you about what it is not - and how minimum state-mandated coverage just isn't enough. Our point wasn't to scare you. Our point was to make it clear that the state's minimum requirement might qualify you to drive legally, but it barely protects you or your future. Accidents happen every minute of every day. And the likelihood is that one of these days the crash will be your fault. And when that happens, you'd better have enough coverage to protect yourself financially.