If you have ever owned or leased a vehicle you have probably heard the term, liability insurance.
One of those “catch all” phrases that does not always mean you know what it is, only that you probably have to have it.
The insurance itself, in simple terms, is auto protection against damage you are liable for.
For whatever reason you may choose to go without the coverage where mandated, keep in mind the penalties associated can result in loss of driving privileges to hefty fines, therefore; the reasonable cost to acquire it does not make financial sense to go without automobile liability coverage.
While liability itself is broken down into two parts, bodily and property, the required mandate is established by each state, and is required in all but Virginia.
This does not mean Virginia allows you to drive without protection; it simply means there is an annual fee required if you choose not to. As liability coverage shelters against financial responsibilities property coverage protects against physical damage, while bodily protects all occupants except drivers listed on your policy.
When buying liability insurance, it is always a good idea to “shop around”. As most things, the cost can vary from company to company. Age, location, driving record and credit are also factors considered in the cost.
An insurance agent will ask questions concerning your financial position, then they can determine amount you need to protect yourself. In addition, you might discuss an umbrella policy as added protection. The cost is usually minimal, but well worth the cost if your financial position warrants it.
With the coverage amount referred to in three sets of numbers, i.e. 50/100/25, each represents an increment in the thousands. For example, the above would represent $50,000 bodily injury per person, $100,000 bodily aggregate and $25,000 property damage.
These are the maximum your policy would pay in the case of liability. A good rule of thumb when deciding is, what do you have to lose if involved in a serious accident involving more than one automobile? Anything above your coverage amount subjects your personal finances when covering responsibility.
One question that is asked quite frequently concerns insurance liability and car rental. Two things to do before you rent a car are check with your current insurance company to determine if your liability covers a rental and what your deductible would be.
Most personal auto policies cover liability when using a rental car for use other than business. The other call should be to the credit card company you use to secure the rental. Some credit card companies provide a level of liability coverage just by using the card.
If you find one or both provide adequate coverage, the optional liability coverage provided by the rental car agency may not be needed.
In the case you are not covered by a third source, most rental companies are required to provide the state minimum; however, this amount is probably not adequate to cover all damages that can occur.
The optional coverage offered at a rate between $9-14 daily usually provides an amount up to $1,000,000 in bodily and property damage.
Another option to consider when renting a car is non-owner auto liability. If you do not own a vehicle and rely on a rental car for your main source of transportation, frequent travelers usually fall into this category; most insurance agencies offer this protection for approximately $200-300 per year.
The benefit of this policy besides liability is the additional coverage the policy provides generally equivalent to a full coverage policy you would otherwise have if owning a vehicle.
Whatever your choice concerning insurance, knowledge of the state laws including penalties and costs associated without being protected are far more expensive than the cost without having liability automobile insurance.
