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What Should I Know About Car Accident Liability?

Tricia Christensen
Updated May 23, 2024
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Car accident liability can refer to your personal responsibility if you cause an accident. It is also a type of insurance you can buy in many states in the US and in many countries that will help make payments to other people involved in an accident that you caused. In most cases if you cause an accident, you are responsible for the costs that are incurred by this accident. These costs include damage to property (including someone else’s car) and damage to people you may injure. When you have car accident liability insurance, you have purchased set amounts of coverage that may help reduce your financial responsibility and instead place this responsibility on the shoulders of your insurance company.

In many states in the US, if you drive you must carry at minimum car accident liability insurance. The amount you carry may be designated by your state. If you’re buying a car on credit, you also will probably need to carry comprehensive insurance and collision insurance. Some states do not have this requirement, which may prove problematic if your behavior results in an accident. When you are at fault for an accident or liable for it, those injured in that accident can sue you for damages to persons or property. Most people view car accident liability insurance as a means of protecting their current or future assets.

One thing you should understand about car accident liability insurance is it may not provide complete protection of your assets. What the insurance company pays depends on how much coverage you purchase. If you have $50,000 US Dollars (USD) in insurance, theoretically your company would pay up to that amount in damages. If damages exceed this amount, you may be personally responsible for any additional damages, and a person involved in the accident or someone damaged by your causing it (such as a relative of a person you severely injured) may sue you. If you have a tremendous amount of assets, you may want to purchase very high levels of liability insurance to cover the amount of these assets so you do not lose them, or some people carry personal umbrella insurance, which can protect very high assets in case of lawsuit.

Unless your behavior was criminal, most car accident liability cases go to civil court, if they are not satisfactorily negotiated by insurance companies. These courts can determine who was responsible if there is dispute on this issue. They can also make rulings about the damages the liable party must pay. If you dispute that you caused an accident and want to fight in court, you should probably seek representation by an attorney.

In many cases, car accident liability is easy to determine, though some people have “no fault” rules in states. These mean that instead of assessing car crash liability, insurance companies each pay for damages to their clients in a crash. This is supposed to reduce lawsuits in civil court, though the court may occasionally grant right to sue under extreme circumstances.

It’s also important to know that car accident liability beyond insurance coverage may only stretch as far as someone else’s income. Many people spend a few dollars a month carrying uninsured motorist insurance, which would mean their insurance would pay for accidents caused to them by uninsured drivers. This can be a good investment because even in states that require insurance, some people may not have it. If they don’t carry insurance because they have few funds, they may have little to no ability to meet the costs of any accidents they cause. It doesn’t necessarily make sense to sue someone who will still be unable to pay for damage they‘ve caused to you.

WikiMotors is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Tricia Christensen
By Tricia Christensen
With a Literature degree from Sonoma State University and years of experience as a WikiMotors contributor, Tricia Christensen is based in Northern California and brings a wealth of knowledge and passion to her writing. Her wide-ranging interests include reading, writing, medicine, art, film, history, politics, ethics, and religion, all of which she incorporates into her informative articles. Tricia is currently working on her first novel.
Discussion Comments
By anon123679 — On Nov 03, 2010

Missing in this article is exactly what makes one liable (at fault) in an accident. What are the rules that the insurance companies use to determine this?

By nq8 — On Jun 09, 2009

I'm renting a car in USA. What kind of car insurance should i take? I don't want to be responsible for anything.

By cap33cool — On May 14, 2009

What does this mean in an auto liability insurance policy $100,000.00/$3,000,000.00 ?

By saad1919 — On Nov 17, 2008

i just want to know if i have liability insurance are the passengers in my car covered or not or how to get coverage to them because my car is 1990 and it worth $2500.00 do you think it worth full coverage pls adv thanks rgrds

Tricia Christensen
Tricia Christensen
With a Literature degree from Sonoma State University and years of experience as a WikiMotors contributor, Tricia...
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