Liability coverage is usually the least expensive insurance coverage available. This policy is a no frills, basic type of coverage that satisfies the laws for financial responsibility when owning and driving a car in your state. This type of coverage will only pay for damages you cause to other people or property owned by another person. It is separated into two sections of coverage; bodily injury liability and property damage. If you cause an accident, the bodily injury liability portion covers the other injured drivers medical and/or funeral expenses. There is usually a limit on the amount of medical bills or funeral expenses that will be paid, so keep in mind, after the limit, you will be responsible for paying for these costs out of pocket. The property damage portion covers damage you cause to another person’s car, or any other property you damage, such as guardrails, fences, mailboxes or homes.
Liability damage can save money, especially if you have an older vehicle that you are no longer financing. You need to consider the value of the vehicle and think about what the insurance company would pay if it were ever totaled. If it is only slightly more than the vehicle is worth, it is not cost effective to pay for more expensive collision or comprehensive coverage. If the vehicle is totaled or damaged, the insurance company would not cover it, but if the value of the vehicle is not worth it, you will not benefit from spending the extra money.