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Automobile Insurance Coverage:Understanding Liability and its Limits

As you consider taking out a policy of auto insurance, you will be faced with making decisions about liability and liability limits within your policy of auto insurance. Through this article, you will be provided with some basic information about liability, liability issues and liability limits contained within an auto insurance policy.

Of course, if after reading this article you have more questions, you will want to visit with your auto insurance agent or with the insurance commissionerís office in your state.

Liability Defined

Generally speaking, the most standard definition of liability is an obligation to pay money to another person or party. In other words, in a car insurance policy, liability coverage is a provision that protects you in the event you end up in a car accident because of your fault. If you have a legal obligation to make a payment for damages or injury arising out of a car accident, because of the liability coverage in your car insurance policy, you car insurance company stands in your shoes and makes this payment for damages or injuries that arise out of a car accident.

Liability Limits Defined

When it comes to car insurance coverage, the liability provisions within that car insurance policy is not going to be unlimited. Rather, each policy of insurance sets forth specific liability limits.

These liability limits are set forth for each occurrence or accident and for each person who may be injured or suffer property damage as a result of the accident. In addition, there may be an overall liability limit associated with a car insurance policy.

When you take out a policy of insurance, you will be asked to make decisions about your liability coverage and liability limits. In this regard, you will want to make certain that you give a great deal of thought to the amount of liability you will need under the terms and conditions of your car insurance policy. You will want to make certain that you and your assets appropriately are protected by having the proper level of liability coverage within your car insurance policy.

Liability Limits and the Costs of Your Auto Insurance Policy

Generally speaking, when it comes to the liability limits in your car insurance policy, the higher the liability your car insurance company assumes, the higher amount of money you will pay in car insurance premiums.

On the other hand, you can lower the costs associated with your car insurance by lowering the liability limits contained in your car insurance policy. Of course, you do not want to sacrifice having appropriate insurance coverage for the sole sake of lowering the premiums you are paying on a car insurance policy. Saving a bit of money on car insurance premiums is not enough in and of itself to sacrifice appropriate liability insurance coverage for you car and for yourself.


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