Does Car Insurance Pay Medical Bills For Other Parties?

Does car insurance pay medical bills for other parties? In the case of a serious accident, that liability coverage may be inadequate insofar as the expenses that it will take to make the injured party 'whole' may be greater than the coverage you have purchased.

"State insurance laws require all licensed drivers to have liability insurance," says Clark Jackson, President and CEO of Jackson and Jackson Insurance Agents and Brokers in Glendora, California. "When an insured is at fault in an automobile accident, the insured is liable for the damage that has been caused to the other party. When that damage includes bodily injury to the other driver and/or passengers, then the bodily injury liability coverage will pay for medical bills that the insured is responsible for up to the limits of his or her policy. This is not an unlimited amount, however. In the case of a serious accident, that liability coverage may be inadequate insofar as the expenses that it will take to make the injured party 'whole' may be greater than the coverage you have purchased."


To the extent that losses are not covered by your liability insurance, Jackson points out, you may be placing your personal assets at risk. "Let's say, for example, that you own a $200,000 home. While the home itself had absolutely nothing to do with the accident, its cash value will be taken into account as an asset in the event that the bodily injury liability coverage on your insurance policy is insufficient to cover medical costs incurred by the other party."




Part of being a careful buyer of automobile insurance is to understand just how much protection you need in the event you are found to be responsible for an accident.

"Consumers often do not understand the basic concept of insurance. Insurance is a mechanism where a number of people pool their resources to pay for the losses of a few. Most of us could not pay $100,000 in bodily injury claims from our own account. Yet, for a premium of around $1,000 per year, an insurance company will pay for those losses for you, or any other insured who has caused an injury. Think of how many years it would take at that amount of premium to cover one serious accident. That's why people buy insurance."

According to Jackson, there is a simple process to follow to assess your insurance needs. First is how much insurance you need. That takes into account a number of considerations, including the miles you drive every day, the type of car you drive, and the personal assets you have that may be subject to a judgment against you should you cause a serious accident. The second is how much insurance you can afford.

"All too often, people who buy the cheapest insurance find out too late that they don't have the protection they need or the claims services they expect." Jackson cautions the insurance buyer that it is up to them to make certain that the choices they make as an insured will often dictate whether their insurance coverage will give them the protection they need in the event of a serious accident that is determined to be their fault.

"Check with the Department of Insurance and with organizations that rate the financial strength of insurance companies before you buy a policy. There is a wealth of information out there if you take the time to find it. An informed insurance purchaser will find that their decisions are the rights ones when they need a claim covered."

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