Auto Insurance Liability Coverage Explained
While nobody ever plans on causing a car accident (that’s why we call them accidents), it happens every day, and at great financial cost. Along with damage to your car or truck, there can be injuries resulting in large medical bills. With healthcare costs going through the roof, how will you pay for the medical bills of someone you accidentally injure?
The answer is with auto liability coverage insurance. As a Richmond auto accident attorney, we often get questions about liability coverage, so we’ll explain this concept in detail.
In Virginia, auto liability coverage is legally required to register a motor vehicle at DMV unless you pay a $500 uninsured motor vehicle fee to the DMV. Your auto liability insurance policy has three distinct coverages: bodily injury, property damage and uninsured/underinsured motorist.
Let’s do a deeper dive into what each of these means to you as an insured driver.
Bodily Injury Liability Insurance. This coverage protects you financially if you cause an accident and injure other people. Bodily injury liability coverage pays for claims from other people including medical expenses, lost wages due to their injuries, and pain and suffering.
Property Damage Liability Insurance. This aspect of your coverage pays for property damage you cause to another vehicle, building, tree or fence (or other damaged property) in a collision that is your fault.
Uninsured/Underinsured Motorist Coverage. This coverage protects you directly in the event that you are in a collision with a driver who either does not have auto liability coverage or leaves the scene of an accident they caused (hit and run). It can also protect you if the at-fault driver’s liability limits aren’t high enough to pay for all of your expenses due to injuries sustained in the accident, but only if your liability limits are higher.
The Virginia minimum liability coverage is “25/50” which stands for $25,000 per person and $50,000 per accident. Other common amounts of this coverage include “50/100” ($50,000 per person/$100,000 per accident) and “100/300” ($100,000 per person/ $300,000 per accident).
As a Richmond auto accident lawyer, we often see how important uninsured motorist coverage can be. Unfortunately, some people choose to drive without insurance. If you get in an accident with such a person, your policy’s uninsured motorist coverage protects you by “replacing,” in effect, the liability coverage the other driver should have.
How Does Uninsured Motorist Liability Insurance Work?
Let’s say you and your spouse are at a stoplight when your car gets hit from behind. The uninsured driver who rear-ended you is at fault for the collision, so he is responsible for your medical bills. Normally his liability insurance would pay, but since he is uninsured, your policy’s uninsured motorist coverage pays up to the amounts designated in your policy. If your policy is “25/50” it will pay up to $25,000 for you and up to $25,000 for your spouse, for a maximum of $50,000 per accident.
Five years later, the same thing happens – only worse. Your spouse suffers severe injuries. Fortunately, you understand the importance of having good insurance and you raised your liability limits to 100/300. The at-fault driver who hit your car has liability insurance with limits of 25/50. Though the negligent driver’s insurance pays out $25,000 towards your spouse’s medical costs, it doesn’t cover all of the extensive medical treatment necessary, let alone lost wages. In this situation, the driver is “underinsured” because his policy won’t cover the total medical costs of the person he injured.
In this situation, your underinsured motorist liability coverage, with limits of $100,000 per person and $300,000 per accident, kicks in. Since the negligent driver’s insurance company paid $25,000 so far for your spouse’s medical treatment, your insurance company will pay up to an additional $75,000. Note: The reason your insurance pays up to $75,000 is because $25,000 was already paid out by the other insurance company, and your policy limit is $100,000 per person no matter which insurance company pays it.
As Richmond auto accident attorneys, we can advise you about the intricacies of auto liability coverage. If you or a loved one have been hurt in a car or truck accident,
we strongly recommend that you explore your legal options. Call Commonwealth Law Group for your free consultation to determine if legal action is right for you at 804.999.9999. Justice starts here.