Automotive insurance mitigates the risk of financial liability or loss a motor vehicle owner may face if the vehicle is involved in a collision resulting in a bodily injury or property damage. Some states have mandated to carry some minimum level of liability insurance for a motor vehicle owner.
Motor vehicle owners or drivers may be protected by different levels of coverage depending on the insurance policy they purchase. The automotive insurance covers claims of liability against the policy holder and any other operator of an insured vehicle, provided they do not live at the same place. Here we will discuss the different types of coverage included in automotive insurance.
Liability coverage
Liability insurance covers claims against bodily injury, property damage for which the policy holder is responsible. The insured can increase the liability coverage above the minimum level of liability by paying an additional amount. Liability insurance does not protect the insured if they operate any vehicle other than they own. It means, when a policy holder drives another person’s vehicle, he is not covered under the policy. You can get non-owners policy for which the insured is covered if you drive some one’s vehicle. In some jurisdictions, liability coverage is available as combined single limit or split limit liability.
Combined single limit
A combined single limit provides coverage for property damage and bodily injury under one single combined limit. For instance, if you have a combined single liability limit and if you collide with another vehicle, the insurance company will give compensation for the damages to the other driver’s car as well as for injury to the driver and the passenger under the same coverage.
Split limit liability
As the name suggests, the split limit liability coverage splits the coverage into property damage and bodily injury. Bodily injury is again split into a maximum payment per accident and maximum payment per person. These limits are often expressed as: “bodily injury per person/bodily injury per accident/property damage”
If a state has, for instance, minimum liability limit as 25/50/25, it means $25,000 for injury per person, $50,000 for injury to more than one person and $25,000 for property damage.
Rental Coverage
Generally, liability coverage is also required for the rental cars. Most rental car companies offer rental coverage to cover damage to the rental vehicle.
Thus, liability insurance will help you and pays the costs associated with property damage and medical expenses for other people involved in an accident where you are found to be at fault.
