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Liability insurance pays on behalf of the insured all sums based on legal liability. The insurer provides reparations based on the insured’s negligence. Negligence is defined as the failure to exercise the degree of care that the law requires to protect others from an unreasonable risk of harm. Most liability losses are settled outside of court based on what the insurer decides might happen if a lawsuit goes to trial.
There are two types of negligence. The first is Comparative Negligence. Florida is a comparative negligence state. This means that it is legal to assign or apportion blame in an accident. A percent of negligence can be assigned to all parties involved in an accident. For example, two vehicles are backing out of parking spaces in a parking lot. Both cars back directly into each other and receive damage to both back bumpers. Each driver may be assigned 50% of the blame.
Contributory Negligence states that if an individual contributes to his or her own loss, then someone else cannot be held liable for the loss.
For liability insurance to pay, the person who is legally liable must have the status of an Insured under the policy. All policies contain a definition of the “named insured.
Liability insurance pays for Damages. This refers to financial loss. Money damage is the only damage with which liability insurance is concerned.
Comparative negligence allows an insurance company to ____ or ____ blame in an accident. (Note: Separate your answers with a comma.)
