When a car crash happens, and liability insurance is involved, it plays a significant role in determining who is responsible for the damages. It assists in covering the cost of property damage or injuries caused by the driver who is to blame. But here’s the thing: the insurance policies are limited in their coverage, which means they will only cover an amount.
If the costs go beyond those limits, the person responsible might have to pay out of pocket. That’s why understanding liability coverage —and knowing your policy inside and out — is so important. Speaking with our Brooklyn car accident attorney can help you figure out your rights and how to handle insurance issues after a crash.
Types of Liability Insurance Coverage
Bodily Injury Liability (BIL)
This insurance covers the cost of medical bills or lost wages as well as legal expenses in the event that you harm the victim of an accident. For instance, if you’re driving and hit another vehicle, then your BIL coverage will cover the injuries of another person to the extent of your policy’s limits.
Property Damage Liability (PDL)
If you damage the property of someone else, like their fence, car or mailbox, PDL protection is activated. It assists in covering repairs or replacement costs. In addition, it will only pay up to the limit of your insurance policy. If the damage is more expensive than that, you might have to make the additional payment yourself.
Understanding Policy Limits and Payout Caps
What Are Policy Limits?
Policy limits are the maximum amounts an insurance company will pay for each type of damage. These are usually shown as split limits, like $25,000/$50,000/$10,000:
- $25,000 for injuries to one person
- $50,000 total for all people injured
- $10,000 for property damage
Some policies use a combined single limit, meaning one total amount for all damages in a crash.
How Limits Affect Your Claim
Suppose the total amount of damage exceeds the limit for coverage, and you’re not protected. In that case, you may be personally responsible for the extra amount. This is why it’s essential to select the right limit of coverage to safeguard your investment savings, property and even personal assets.
State Requirements for Liability Insurance
New York Minimum Coverage
In New York, drivers are required to carry at least:
- $25,000 for bodily injury to one person
- $50,000 for bodily injury to all persons in an accident
- $10,000 for property damage per accident
- $50,000 in Personal Injury Protection (PIP), which covers your medical costs regardless of fault
- $25,000 per person / $50,000 per accident for uninsured motorist coverage
These are the minimums—but in many cases, they may not be enough if the crash is serious.
How New York Compares to Other States
Each state has different rules. Some require more coverage, some less. However, in places with lower limits, drivers may be at higher financial risk if they cause major damage or injuries.
What Happens If Damages Exceed Policy Limits?
Personal Financial Risk
If you cause an accident and the total damages go over your policy’s limits, you could be sued. The court may order wage garnishment or place liens on your property to collect the money owed. That’s a serious risk—and one reason why higher coverage is a smart choice.
Underinsured Motorist Coverage
The insurance can help when you’re injured by an individual whose insurance coverage isn’t sufficient to cover your medical costs or the repairs to your car. It helps bridge gaps between the amount that an at-fault insurance company pays the driver and the actual costs.
Umbrella Insurance Policies
If you want even more protection, consider umbrella coverage. It adds extra coverage above your regular limits. This can be a good option if you own a home, have savings, or want to protect your assets.
Ways to Protect Yourself
Check and Adjust Your Coverage
Think about the money you could risk if you cause an accident that is serious. Perhaps it is the right time to increase your insurance limits to help avoid financial strain.
Consider Extra Options
Add uninsured/underinsured motorist coverage to protect yourself from others’ low limits. Also, Personal Injury Protection (PIP) is helpful because it covers your medical bills no matter who caused the accident.
Review Your Policy Regularly
Life is unpredictable, and so will your insurance. Check your insurance policy each year, particularly if you purchase a house, have kids, or switch jobs. Insurance agents can assist you in choosing the best options.
Conclusion
Liability insurance is more than just a requirement — it’s a way to protect your future. Choosing the right coverage helps you stay financially safe in case of an accident.
If you’re unsure about your policy or need help after a crash, Brooklyn Injury Attorneys, P.C., can guide you. We can explain your options, deal with insurance companies, and make sure your rights are protected every step of the way.