How does liability insurance work? Full vs. Limited

When it comes to insuring your vehicle, there is no such thing as “tort liability insurance”. Rather, liability insurance is a system in which the offending driver is held financially responsible for the damages they cause and can be sued. In most cases, claims against the offending driver will be covered by their liability insurance.

Liability insurance or the fault-based auto insurance system applies in 38 states and the District of Columbia. In these at-fault states, the driver who causes an accident is financially responsible for injuries to others and/or damage to personal property. In most cases, these damages will be covered by the responsible driver’s liability auto insurance, up to the limits of their policy. But drivers can also be sued for damages such as pain and suffering.

The remaining 12 states use a no-fault auto insurance system. In these states, drivers must purchase personal injury protection (PIP) and use their own insurance to cover their medical expenses, regardless of who is at fault for the accident. A driver can be sued, but only if certain conditions are met (such as a monetary threshold or if the accident resulted in disfigurement or death).

Full vs. Limited Tort Liability

Three states – Kentucky, New Jersey and Pennsylvania – are considered “preferred” no-fault states, where drivers can choose to carry no-fault or liability insurance. Drivers who opt for the tort coverage system can opt for “full” or “limited” tort coverage. Definitions vary from state to state, but generally speaking, comprehensive liability insurance allows you to sue the at-fault driver for pain and suffering as well as medical expenses.

Limited tort, on the other hand, limits your ability to sue for pain and suffering and may also limit other claims. What precisely constitutes pain and suffering varies by condition, but can include discomfort resulting from physical injury as well as emotional or mental trauma or anguish. Some states also include inconvenience, loss of enjoyment of life, or loss of companionship.

In the 38 states that follow the tort insurance system, drivers are not limited in their right to sue an at-fault driver. Therefore, they have the ability to recover damages for medical expenses, lost income, vehicle repairs, and pain and suffering. If the responsible party’s insurance does not fully cover the costs, you may have to pay out of pocket or purchase coverage under your own policy if you have underinsured motorist (UIM) coverage or collision coverage . Your deductible will apply when filing a collision claim. If you successfully make an underinsured motorist or collision claim under your policy, your insurance company may file a subrogation against the other driver’s insurance company to recover the loss.

In the three no-fault “choice” states, comprehensive liability insurance is one of the options available to drivers who choose the liability system. Full liability insurance is more expensive than limited liability, but your right to sue is not restricted. You retain the ability to sue for pain and suffering. Although it is difficult to assign a monetary value to pain and suffering claims, they can add up quickly depending on the judge’s decision and the severity of the injuries.

If you live in Pennsylvania, Kentucky, or New Hampshire, contact an insurance agent or company to discuss your options and determine if full liability is worth the extra cost for your situation.

Limited tort auto insurance allows non-at-fault drivers to sue at-fault drivers for all damages except pain and suffering. It is only available in the no-fault “choice” states of New Jersey, Pennsylvania, and Kentucky. Drivers in these three states can reject no-fault insurance laws and choose a tort insurance policy instead. If they choose a tort policy, they can choose between a full tort policy and a limited tort policy.

Limited liability insurance tends to be less expensive than full liability insurance, but you may be liable for more long-term damage if you are seriously injured in an accident and unable to sue the driver at fault. If you are a resident of one of the no-fault “choice” states, a local agent or insurance company can help you understand the benefits and consequences of each option available to you.

Filing a claim in a tort insurance state is similar to doing so in a no-fault state, but determining who is legally at fault can be more complicated because insurance companies have more funds at stake and payment depends on the laws. on the negligence of the specific state. .

In general, you should do the following when you are involved in an accident:

  1. Seek medical attention for anyone injured by dialing 911.
  2. Contact the police. Some states legally require you to notify the police in the event of a car accident resulting in serious injury or damage. They will help file a police report and determine who is at fault. Write down officers’ names and badge numbers and ask when and where you can access the police report.
  3. Exchange information with the other driver, including driving license and insurance information. Providing this information to your insurance company can help expedite the process.
  4. Document the damage taking photos or videos and asking witnesses for their names and contact details.
  5. Tow Call Service if your car is unusable. They can tow your vehicle to a repair shop or to your home.
  6. Contact your insurer or company to begin the claims process. They may ask you to submit a repair estimate before filing a formal claim.
  7. Get a repair quote. Most insurance companies allow you to choose the repair shop, but they will review the quote in detail once received.
  8. Work with the insurance adjuster to provide your account of the accident and any other document requested.

Once insurance companies have the information they need, they will begin to determine negligence and fault. Negligence could be reckless actions such as speeding or failure to take reasonable action such as not yielding. State laws dictate when and how much you can recover from the other party. When purchasing insurance through an agent or representative of an insurance company, be sure to understand your rights under the specific policy and your state’s laws.

For more information on car insurance, see the following guides:

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For more information on other types of insurance, see the following guides:

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