Why a Liability Insurance Car Policy Can’t Let You Down

Like most people, you probably don’t fancy having to pay for car insurance. Making payments on something you may need but also may never use is frustrating. Imagine having to pay student loans for a theatre degree. But like all backup plans, you’re really glad you thought ahead should you need to use them. We don’t all have the personal funds to take care of the astronomical expenses that come with paying for property and bodily damages after a car crash. And if we’re the ones who caused the collision, you can bet the other motorist will be expecting compensation. Wouldn’t you if it was you?

Car Insurance is for Champions

We never know what’s going to come up in life. One minute we may be sitting in traffic listening to Ira Glass introduce this week’s radio show, and boom! You rear-end the person in front of you. Because you are the driver responsible for the fender bender, you are the one who needs to take care of the cosmetic damage to their car. And as they rub their neck and roll their head from one shoulder to the other, there’s a good chance you’ll be paying for some medical bills, too.

Want to know something beautiful? These expenses don’t have to be paid for out of your own pocket. A liability insurance car policy will do just the trick. Liability car insurance isn’t just required in near every state across the country, but it saves you from financial ruin. While this type of insurance package doesn’t cover any damage sustained to your own vehicle or person, it covers the damages borne by the other motorist.

Auto liability insurance is built of two components: Property Damage Liability and Bodily Injury Liability. If you are a California driver and you rear-ended someone on the 101, your liability insurance plan will supplement the expenses as follows:

  • $15,000 for injury/death to one individual
  • $30,000 for injury/death to more than one individual
  • $5,000 for property damage

The numbers above represent the basic liability insurance package, and is only California’s minimum. Keep in mind that insurance minimums vary by state. The Department of Motor Vehicles (DMV) advises that motorists carry more than their state’s minimum. Here’s a quick look as to why.

The Numbers

According to the Association for Safe International Travel (ASIRT) over 37,000 people perish in auto collisions every year, with another 2.35 million becoming injured or disabled. What does this cost the U.S., aside from a tremendous loss in human life and the standard of living? Traffic accidents cost the U.S. $230.6 billion a year. That number translates to roughly $820 per person. This number is low in comparison with the average auto liability insurance claim as reported by the Rocky Mountain Insurance Information Association (RMIIA), which found the average auto liability claim for property damage was $3,231, with the average cost for bodily injury amounting to $15,443. Can you imagine paying this out of pocket? Not just that, but even California’s minimum doesn’t cover it entirely. This is why any insurance agent worth their salt will tell you to consider updating or adding more insurance to your policy. The Insurance Information Institute (III) has learned that 78 percent of insured motorists purchase both auto liability insurance and comprehensive coverage, with another 72 percent buying collision coverage as of 2013.

We can’t control what happens on the road. Inclement weather, poor road conditions and bad drivers all increase your chances of an auto accident. No one’s perfect, and even we might accidentally hit someone else’s car, we’re only human. But instead of paying thousands of dollars, all we need to pay is less than a fraction of that once a month for auto liability insurance. Would you rather pay less than $100 a month to protect your assets or thousands of dollars at any given moment? The choice – as always – is yours.

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