Automobile Liability Insurance
Coverage that pays for bodily injury and property damage that you cause to others in a car accident. It includes both bodily injury liability (for medical expenses, lost wages, and pain and suffering) and property damage liability (for vehicle repairs and property damage).
Example
“Karen's automobile liability insurance paid $85,000 in medical bills and $12,000 in car repairs after she caused a three-car accident on the interstate.”
Memory Tip
Think 'AUTO LIABLE = Automobile Owner Totally Owes, Liable Insurance Assists By Living Expenses' - it covers what you owe others.
Why It Matters
This is the most legally and financially critical part of auto insurance, as it protects your personal assets from devastating lawsuits. Without adequate liability coverage, accident victims can garnish your wages, seize your home, and pursue your assets for years or even decades.
Common Misconception
Many drivers believe liability insurance covers their own injuries and vehicle damage, but it only covers harm you cause to others. Your own medical bills and car repairs require separate coverage like collision, comprehensive, medical payments, or personal injury protection.
In Practice
David has $250,000/$500,000 bodily injury and $100,000 property damage liability coverage. He runs a red light and hits a luxury SUV with a family of four. The damages include: $180,000 in medical bills for the injured passengers, $45,000 to replace the totaled SUV, and $15,000 for a damaged storefront. His liability insurance pays the full $240,000 in costs. Without this coverage, David would face potential wage garnishment and asset seizure to satisfy a $240,000 judgment.
Etymology
From Latin 'mobilis' meaning 'movable,' 'ligare' meaning 'to bind' (creating liability as legal obligation), and 'securus' meaning 'free from care,' describing protection from legal obligations arising from automobile accidents.
Common Misspellings
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Related Terms
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