If you or a loved one has been injured in a car accident, it’s important to have a basic understanding of how car insurance works. Both your own car insurance and the insurance of the other driver(s) involved in the accident.

Although car insurance requirements vary from state to state, there are certain basic coverages typically included in a car insurance policy. These include liability coverage (bodily injury and property damage), comprehensive coverage, and collision coverage.

But, how can you know how much your auto insurance policy will pay out to cover a claim against you? Read further to find out.

Liability Insurance

The amount of insurance coverage you have purchased is typically referred to as your policy limit. This is the maximum amount your car insurance policy will pay for a particular claim, while the policy is in effect.

Your car insurance policy may include several different policy limits. First and foremost, there are liability coverage limits.

If you are found to be legally responsible for harming someone else or their property, you will be required to pay for the damages you have caused. Liability insurance will cover that.

Liability coverage only applies if you or someone else covered under your car insurance policy is at fault for an accident. It is also important to note that this type of coverage only pays others who were harmed by you or someone else covered under your policy.

Liability insurance can be broken down into two types of coverages:

1. Bodily Injury; and
2. Property Damage
Bodily Injury
In a car insurance policy, the portion that pays for the harm you caused to another person is called bodily injury. You will likely see a set of two numbers that represent your bodily injury coverage limit, for example:

250/500

The first number (250) represents the maximum amount of bodily injury coverage the insurance policy will pay out per person for an accident. The second number (500) represents the total maximum amount of bodily injury coverage the insurance policy will pay out for the accident, regardless of how many people were injured.

These numbers represent thousands of dollars. So, if your policy shows 250/500, that means $250,000 per person/$500,000 per accident.

Property Damage

Property damage is a separate coverage that applies if you caused damage to someone else’s vehicle or property. For example, if you have an accident and your vehicle damages not only the other party’s vehicle but a fence alongside the road as well.

For property damage coverage, your auto insurance policy will indicate a different limit. This limit is usually represented by one number, for example:

100

This number will represent the maximum amount of property damage coverage your insurance policy will pay out for all property damaged resulting from any one accident that was your fault.

Sometimes, your insurance policy will indicate bodily injury and property damage limits together, and you may see, for example:

250/500/100

This means your limits are $250,000 per person for bodily injury, $500,000 total per accident for bodily injury, and $100,000 total for property damage per accident.

Comprehensive & Collision Coverages

An auto insurance policy can also include coverage for damage to your own property. Comprehensive and collision insurance are types of car insurance coverages that will pay damage to your motor vehicle.

Comprehensive coverage pays for damage to your car that is not related to your operation of the vehicle, such as damage caused by things like vandalism, theft, falling trees, floods, hail, and other kinds of damage not related to your operation of the vehicle and that are not excluded by your policy.

Collision coverage, on the other hand, pays for damage caused when your car collides with another vehicle or object, and you or someone covered under your policy is at fault for the accident.

If you purchase comprehensive and/or collision coverage, rather than paying out a pre-determined limit, a loss to your vehicle will be based on its actual cash value (ACV), which is the fair-market value of your vehicle at the time of the loss.

Consult with an Experienced California Car Accident Attorney
Even when simplified, understanding what insurance you have to cover damages resulting from an accident can be difficult. This is where an experienced car accident attorney can help.

A qualified car accident attorney can answer your questions and explain what coverages and limits are available to protect you and your loved ones. For assistance with making a claim against your own car insurance policy or someone else’s, contact an experienced California car accident attorney from eAccidents today at 844-400-0123. eAccidents makes it as easy as 1-2-3.