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What are the limits of liability?
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The purpose of liability insurance is to provide reimbursement if you cause bodily injury or property damage to someone else after a car accident.
Having an auto insurance policy with the minimum liability limits for your state will keep you in compliance with financial responsibility laws, but it's often in your best interests to opt for more extensive coverage. Some state minimums are very low and would not provide sufficient protection in the event you were responsible for a serious car accident.
For example, the property damages caused in a chain reaction accident on the highway could easily exceed the $25,000 limit of a very basic liability insurance policy.
Having an auto insurance policy with the minimum liability limits for your state will keep you in compliance with financial responsibility laws, but it's often in your best interests to opt for more extensive coverage. Some state minimums are very low and would not provide sufficient protection in the event you were responsible for a serious car accident.
For example, the property damages caused in a chain reaction accident on the highway could easily exceed the $25,000 limit of a very basic liability insurance policy.
Determine the Amount of Car Insurance You Need
You may need extra liability insurance to protect your finances after an auto accident in the following cases:- You own your own home, have your own business, or have significant investment income that would be at risk in a lawsuit.
- You work in a profession that is in the public eye or perceived to have a high income, as this will make you more vulnerable to lawsuits after an accident.
- You are the parent of a teen driver, as young people are statistically more likely to be responsible for car accidents.
- You drive your vehicle as part of your job and your employer has specific minimum liability requirements.
- $100,000 in bodily injury coverage per person.
- $300,000 in bodily injury coverage per car accident.
- $50,000 in property damage coverage per car accident.
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