What is liability insurance and how does it work?

Liability insurance is the most basic form of auto insurance coverage, and exists solely to give drivers accountability when their actions lead to injury or damage of another person’s property. Simply put, if you’re at fault in an accident, your liability insurance will help cover the other driver’s medical expenses and repair or replacement costs.

What does liability insurance cover?

Liability insurance helps cover the cost of losses you cause to another person or their property—whether through negligence or unintentional fault. The main feature of liability insurance is that it covers the costs of medical bills or repairs for other people and their property.

What are the different types of liability coverage?

Insurance companies may provide two different types of liability coverage— occurrence or claims-made —and each comes with its own set of advantages and disadvantages. The limitations associated with each type of policy are largely dependent upon two factors: