When it comes to automobiles, liability insurance is what protects you if you are involved in an accident and you are at fault, causing damage to the property of others. If you were driving and looked away from the road for a brief moment and hit another car, you are clearly at fault. The other drivers passenger may even require medical care. Since you caused the accident, you are liable for their damages this is why it is called liability insurance. With liability insurance, you will not be responsible for damages or medical bills up to a certain dollar amount, depending on the coverage you choose.
Liability insurance typically covers a dollar amount of damages and hospital and medical bills for the other party involved in the accident you caused. Your liability insurance will pay for a maximum amount of car repairs, for example, and after that dollar amount you are personally responsible for paying damages. If your liability policy covers up to $15,000 in damages, you will have that amount covered in any accident. If the damages to the other car are more than $15,000, however, you will have to pay the remainder. This system of coverage is also applicable to medical bills incurred by passengers in the other car.
Many people pay a higher premium so that the amount of damages covered by their car insurance will be higher. They pay more to be prepared in case they are responsible for a major automobile accident and the resulting damages. Knowing that your bills will be covered for significant damages is something many people prefer, and its why they spend the extra money every month for more comprehensive coverage.
But, should another driver hit you, and cause damage to your body or your car or both, their liability insurance coverage will cover the damages up to the limit of their coverage. If the damages are greater than their coverage limit, you will have to get the difference from them yourself.