All car insurances policies are not the same, and the mandatory liability insurance might also vary between states. New Hampshire is the only state that does not mandate liability insurance. However, it is important to know what types of liability insurance are available, so that you can decide how much more coverage you need beyond the mandatory amounts.
Liability insurance has two main categorizations. One is bodily injury liability that will cover medical expenses, lost earnings, pain and suffering and other damages. The other is property damage liability, which covers damage to property and might include loss of use.
Worst Case Scenario
When you have coverage for bodily injury liability, the policy will help you pay the costs of damages for those injured, when you are at fault for the accident. Apart from medical expenses, and loss of earnings it can also cover legal fees, in the event your case goes to trial. When you are covered for property damage liability, your policy will help you pay for property damages caused by the accident where you are at fault. This will cover expenses for car repairs, car replacement, and repairs or replacement of items on a property like fences and so on.
The Lowest Denominator
Most states set a mandatory amount for these liabilities; however, such amounts may not be enough. For instance, if you have coverage for property damage liability for $20,000, and if the accident you have caused has resulted in property damage worth $30,000, you will have to pay the balance of $10,000. Therefore, it is not wise to keep to the minimum mandatory limits set by the state, since you can end up paying out of your pocket in case of an accident. But every financial situation is different. There are risks when it comes to driving and it behooves everyone to drive safely and correctly.
A Common Frame of Mind
The cheapest insurance is many times the most common for people to select. Most people are confident in their driving so choosing to have to pay something out of pocket if they are in an accident is just part of life. This incentive may make most drivers drive better and because people have other financial obligations in life, paying a premium for car insurance is just not always appealing.
Everything is Included
Secondly, if you opt for only liability insurance, your car is not covered, and you might want to consider a comprehensive policy, which takes care of the damages to your vehicle as well.