Liability insurance is a crucial form of protection for drivers, covering the costs of damages and injuries sustained by other drivers or passengers in the event of an accident. However, there are certain situations where liability insurance may not provide coverage. In this article, we’ll explore what liability insurance does not cover in the event of an accident, with insights from Everfi, a leading provider of financial education.
What is Liability Insurance?
Liability insurance is a type of insurance that provides financial protection to individuals and businesses in the event that they are found legally responsible for causing harm to another person or their property. Liability insurance is commonly used in the context of auto insurance, where it covers the costs of damages and injuries sustained by other drivers or passengers in the event of an accident that is your fault.
Types of Liability Insurance
Liability insurance typically covers three types of damages: bodily injury, property damage, and personal injury. Bodily injury coverage pays for medical expenses, lost wages, and other related expenses if someone is injured in an accident that you caused. Property damage coverage pays for the costs of repairs or replacement if you damage someone else’s property in an accident. Personal injury coverage covers claims of libel, slander, or other personal injuries that are caused by your actions.
What Does Liability Insurance Not Cover in the Event of an Accident? Everfi Explains
Intentional Acts
Liability insurance does not cover intentional acts, such as road rage incidents or deliberate collisions. If you intentionally cause an accident, your liability insurance will not provide coverage for the damages or injuries caused.
For example, if you intentionally ram your car into another driver’s vehicle, your liability insurance will not cover the costs of the damages or injuries sustained by the other driver or passengers.
Criminal Acts
Liability insurance does not cover criminal acts, such as driving under the influence or committing a hit-and-run. If you engage in criminal behavior while driving and cause an accident, your liability insurance will not provide coverage for the damages or injuries caused.
For example, if you are driving under the influence and cause an accident that injures other drivers or passengers, your liability insurance will not cover the costs of their medical bills or vehicle repairs.
Non-Covered Drivers
Liability insurance does not cover drivers who are not listed on the policy. If someone else is driving your car and causes an accident, your liability insurance may not provide coverage for the damages or injuries caused.
For example, if you let a friend borrow your car and they cause an accident, your liability insurance may not cover the costs of the damages or injuries sustained by other drivers or passengers.
Uninsured or Underinsured Drivers
Liability insurance does not cover damages or injuries sustained by uninsured or underinsured drivers. If you are in an accident with an uninsured or underinsured driver, you may not be fully compensated for the damages or injuries sustained.
For example, if you are in an accident with an uninsured driver and sustain $10,000 in damages and medical bills, but your liability insurance only covers $5,000, you may be responsible for paying the remaining $5,000 out of pocket.
FAQ: What Liability Insurance Does Not Cover in the Event of an Accident
Q: What is liability insurance?
A: Liability insurance is a type of auto insurance that covers the costs of damages and injuries sustained by other drivers or passengers in the event of an accident that is your fault.
Q: What does liability insurance cover?
A: Liability insurance covers the costs of damages and injuries sustained by other drivers or passengers in the event of an accident that is your fault. This includes the costs of vehicle repairs, medical bills, and other related expenses.
Q: What does liability insurance not cover?
A: Liability insurance does not cover intentional acts, criminal acts, non-covered drivers, and uninsured or underinsured drivers. These situations are typically excluded from liability insurance coverage.
Q: What is an intentional act?
A: An intentional act is any action that is done deliberately or on purpose. If you intentionally cause an accident, your liability insurance will not provide coverage for the damages or injuries caused.
Q: What is a criminal act?
A: A criminal act is any action that is against the law. If you engage in criminal behavior while driving and cause an accident, your liability insurance will not provide coverage for the damages or injuries caused.
Q: What happens if someone else is driving my car and causes an accident?
A: Liability insurance may not cover drivers who are not listed on the policy. If someone else is driving your car and causes an accident, your liability insurance may not provide coverage for the damages or injuries caused.
Q: What happens if I am in an accident with an uninsured or underinsured driver?
A: Liability insurance does not cover damages or injuries sustained by uninsured or underinsured drivers. If you are in an accident with an uninsured or underinsured driver, you may not be fully compensated for the damages or injuries sustained.
Q: How can I protect myself in these situations?
A: You can protect yourself in these situations by adding additional coverage to your auto insurance policy, such as collision coverage or uninsured/underinsured motorist coverage. You can also work with an insurance professional to determine the right coverage for your needs.
Q: What should I do if I am in an accident?
A: If you are in an accident, you should first make sure that everyone is safe and call for medical assistance if needed. You should also exchange insurance and contact information with the other drivers involved. It’s important to report the accident to your insurance provider as soon as possible.
Conclusion
Liability insurance is an important form of protection for drivers, covering the costs of damages and injuries sustained by other drivers or passengers in the event of an accident. However, it’s important to understand what liability insurance does not cover in order to fully protect yourself and your assets.
By understanding the situations where liability insurance may not provide coverage, you can take steps to mitigate your risk and ensure that you have adequate protection in the event of an accident. Working with an insurance professional and staying informed about your policy can help you make informed decisions about your coverage and protect yourself on the road.
