Liability Insurance Coverage

Liability Insurance is required by law to operate a vehicle.  The limits of the insurance vary from state to state.  California requires $ 15,000 per person and $ 30,000 per accident.  It is important that the insured carries appropriate coverage limits, not just what is required by the state.  In most cases, as it is in California, the state’s minimal limits are outdated and would not be sufficient to pay for damages caused by the insured, placing their assets at risk.

There are two components of Liability Insurance: Bodily Injury and Property Damage.  Bodily Injury would pay for damages caused by the insured to the other parties involved if they were physically injured.  Property Damage would pay for the damages caused to the property of the other parties.  Both would only pay up to the limits of the insured’s coverage.  For example, if you had liability limits of $ 100,000 per person, $ 300,000 per accident for Bodily Injury and $ 100,000 in Property Damage and were involved in an at fault accident on the 405 in Los Angeles that caused injury to one person in the amount of $ 115,000 and one vehicle in the amount of $ 22,500, your insurance would cover $ 100,000 of the $ 115,000 of the Bodily Injury claim and all of the $ 22,500 of the Property Damage.  You would be liable for the additional $ 15,000 in Bodily Injury damage.

It is important to have the right coverage to abide by the requirements from your lender, as well as to protect your assets.  In many cases, people carry state liability limits, which are far too low.  Feel free to have us review your current coverage and provide you with available options.


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