Have questions about what happens to your finances if you are found at fault in a car accident?
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What Happens Financially If You Cause a Car Accident?
Auto insurance can feel overwhelming, especially when trying to understand what each coverage actually does. One of the most important parts of your policy is liability coverage, the protection designed to cover damages or injuries you may cause to others in an accident.
Liability coverage is generally divided into two categories: bodily injury liability and property damage liability.
Bodily Injury Liability
Bodily injury liability helps cover medical expenses, lost wages, and legal costs if you are responsible for injuring another person in an accident. This can include:
- Medical bills
- Rehabilitation costs
- Lost income
- Legal expenses
- Pain and suffering claims
For example, if you rear-end another driver and they require medical treatment, bodily injury coverage may help pay for those expenses up to your policy limits.
Property Damage Liability
Property damage liability covers damage you cause to someone else’s property. Most commonly, this includes damage to another vehicle, but it may also apply to:
- Fences
- Mailboxes
- Buildings
- Light poles
- Landscaping
Repair costs today can add up quickly, especially with newer vehicles and technology-heavy repairs.
Why State Minimum Limits May Not Be Enough
Many drivers carry only the minimum insurance required by the state. While this may satisfy legal requirements, minimum limits may not fully protect your finances after a serious accident.
If damages exceed your policy limits, you could be responsible for paying the remaining costs out of pocket.
Liability coverage is designed to protect your financial future if an accident happens. Understanding your limits and reviewing your policy regularly can help ensure you have the protection you need.
Questions about your current coverage? Our team at Cornerstone Insurance Agency LLC is here to help review your policy and answer your questions.
This article is for informational purposes only. You should not act based on this information without first consulting with your insurance agent; if you would like a quote from a Cornerstone Insurance Agency licensed agent, contact us. We disclaim all liability for actions taken or not taken by you based on the contents of this article which is provided “as is.” Cornerstone makes no representation that this content is error-free.