What Is Liability Insurance?
California law requires that every driver have liability insurance of at least:
$15,000 PER PERSON/$30,000 PER OCCURRENCE for Bodily Injury or Death
This means that if a driver causes a crash, that driver’s insurance will pay for any damage they cause up to liability policy limits.
The Bodily Injury limits cover: medical treatment, lost wages, pain, inconvenience, among other things, or in the worse case – death.
The PER PERSON limit is the max the insurance company will pay for per person injured/killed in the crash. Regardless of the actual value of their losses.
The PER OCCURRENCE amount is the max the insurance company will pay for the crash in total, if there is more than one person injured/killed.
This limit applies regardless of how many people are involved.
However, each person injured/killed cannot get more than the PER PERSON limit.
The Property Damage limits cover:
Repairs to the vehicles that gets damaged
Car rental while the vehicles are being repaired
Personal property in the vehicles that is damaged
This limit is the most that will be paid out in total, regardless of how many vehicles or property is damaged.
IF YOU ARE DRIVING AROUND WITHOUT INSURANCE: YOU MAY BE PERSONALLY RESPONSIBLE FOR PAYING THE DAMAGES YOU CAUSE IN CRASH.
Of course the limits above are just the minimums required. You should always get a policy that is higher. This is especially true if you have any assets, such as a house. The reason is that if you cause a crash and your liability limits are not enough to cover the damages you cause, you may be personally responsible for anything over the limits. Typically your insurance company is only required to pay up to your liability limits.
In addition to liability insurance, it is important to also have Uninsured Motorist/Underinsured Motorist coverage.
Are you more confused now? Still not exactly sure what liability insurance is?
Let us know and we’ll answer your questions.
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