What is Liability Coverage?

What is Liability Coverage and Why Do I Have to Have it?

what-is-liability-coverageWhat is lia­bil­i­ty cov­er­age?

Lia­bil­i­ty cov­er­age sim­ply pro­tects you from law­suits in the event you are involved in an acci­dent.
Lia­bil­i­ty cov­er­age pro­vides pro­tec­tion even if you are dri­ving anoth­er per­son­’s vehi­cle.

There are three main types of lia­bil­i­ty cov­er­age:

Bodily Injury

Bod­i­ly Injury cov­er­age is typ­i­cal­ly sold as split lim­its, a lim­it for each pas­sen­ger and an over­all lim­it for the acci­dent. For exam­ple, if you elect to pur­chase $100,0000/$300,000 cov­er­age, you have the fol­low­ing cov­er­age max­i­mum pay­outs in the event of an acci­dent:

  • $100,000 max­i­mum pay­ment to any indi­vid­ual involved in the acci­dent
  • $300,000 max­i­mum pay­ment for all indi­vid­u­als involved in the acci­dent.
  • The min­i­mum lim­its for BI in the State of Wis­con­sin is $25,000/$50,000.

Always con­sult with your insur­ance agent about the risks asso­ci­at­ed with pur­chas­ing min­i­mum lim­its.

Medical Payments

This cov­er­age pro­vides pro­tec­tion for med­ical and/or funer­al costs for you in the event of an acci­dent. Please check with your agent for a com­plete descrip­tion on med­ical cov­er­age and its rela­tion to oth­er exist­ing health/life cov­er­age you may have.

Property Damage

As the name implies, prop­er­ty dam­age pro­tects you from any dam­age result­ing to a per­son­’s car, or oth­er prop­er­ty in the event of an acci­dent. For exam­ple, if you pur­chase $100,000 of Prop­er­ty Dam­age, the max­i­mum amount paid for dam­age to oth­er indi­vid­u­al’s prop­er­ty would be $100,000 for the acci­dent.

Uninsured/Underinsured Motorist

Unin­sured Motorist pro­vides cov­er­age for you in the event the oth­er dri­ver does not have insur­ance at all. Under­in­sured Motorist pro­vides lia­bil­i­ty cov­er­age for you in the event the oth­er dri­ver does not have enough insur­ance cov­er­age.