Liability Coverage is the most important aspect of Auto Insurance. Most individuals believe that Full Coverage (Comprehensive & Collision) is the most important part since it repairs damage to their own vehicle. This assumption is false, since you can always limit your risk on damage done to your own vehicle. You cannot limit your risk when you cause property damage or bodily injury to another vehicle, or person. This is why having the appropriate amount of Liability Insurance is critical for everyone needing Auto Insurance. Below are some key points to consider when choosing your Liability Insurance Limits.

Some items to consider when purchasing Liability Auto Insurance

Liability Insurance Is Required in Most States

Most states require you to carry a minimum amount of Liability Coverage. For instance, the state of Virginia requires 20,000 Property Damage Coverage, 25,000 Bodily Injury Coverage per person, and 50,000 of Bodily Injury Coverage for the entire accident.  Each state has their own requirements which may differ from Virginia. If you fail to purchase coverage, you could face state fines and driver’s license suspension.

Property Damage Coverage

This coverage will pay for property damages up to your policy limit to the person or entity that you caused damage to. You should consider having higher than Minimum limits since most vehicles on the road are worth more than $20,000. For example, say you were at fault in an accident and totaled a brand new Escalade. If you had minimum coverage in Virginia, you could be held personally responsible to pay the remaining balance owed which could be in excess of $50,000. This is why you should consider having higher Property Damage Coverage than just state minimums.

Bodily Injury Coverage

This coverage will pay for injuries caused by you in the event of an auto accident. Again, the minimums would not be adequate in this scenario if you caused bodily injury. Remember, once your coverage limit is reached, the Insurance Company is no longer responsible to pay or defend your claim. This could create a significant financial hardship on you if you do not have higher liability limits.

Uninsured/Uninsured Liability Coverage

Most states require this coverage as well. However, this is a benefit, as it will provide protection to you if someone hits you and does not have insurance, or not enough coverage to pay damages to you. This also protects you from “Hit and Run” incidents. In most cases, the coverage limits match your regular Property Damage/Bodily Injury Coverage Limits. Another key point; claims filed under this coverage will not increase your insurance premium.

What Liability Limits to Purchase

Hopefully, we dispelled the “myth” that the insurance company will pay for my accident. This is why it is important to know what limits you currently have and to adjust them to meet your needs. We suggest that you have at least $100,000 Property Damage Liability, $100,000 Bodily Injury Coverage per person, and $300,000 Bodily Injury Coverage per accident. The decision should also be made on your current life situation as well. Someone just starting their life on their own, will traditionally have lower Liability Coverage needs than a person that owns a multi-million-dollar business. The key point is to know what coverage you have and to be comfortable with your own coverage.