What are the three core components of minimum liability insurance, often abbreviated with numbers like \(15/30/5\)?
1. Bodily Injury Liability per person.
2. Bodily Injury Liability per accident.
3. Property Damage Liability per accident.
What does the "Bodily Injury Liability per person" limit cover?
This is the maximum amount your insurance will pay for a single person's injuries (medical bills, lost wages) in an accident that you cause.
What is the significance of the "Bodily Injury Liability per accident" limit?
This is the total maximum amount your insurance will pay for all injuries to all people combined in a single accident you cause, regardless of how many people were hurt.
Explain what "Property Damage Liability per accident" is for.
This covers the cost of damage you cause to someone else's property in an accident, such as their vehicle, a building, a light pole, or a fence.
In a state with minimum coverage of \(25/50/20\), what does the first number, \(25\), represent?
It represents \(\$25,000\) in Bodily Injury Liability coverage for any single person you injure in an at-fault accident.
Using the example of \(25/50/20\) minimum coverage, what does the middle number, \(50\), mean?
It means the policy has a maximum payout of \(\$50,000\) for Bodily Injury Liability for all people injured in one single accident you cause.
With a \(25/50/20\) policy, what does the final number, \(20\), signify?
It signifies a maximum of \(\$20,000\) in Property Damage Liability coverage for any one accident you cause.
What happens if you cause an accident where the damages and injuries cost more than your liability policy limits?
You are personally responsible for paying all amounts that exceed your coverage limits. The other party can sue you to collect the difference from your personal assets.
Does your state-mandated minimum liability insurance cover repairs to your own car if you cause the accident?
No. Liability insurance only pays for damages you cause to others. To cover your own vehicle in an at-fault crash, you need to purchase Collision coverage.
