When the time comes to buy auto insurance, one of the decisions you need to make is about liability coverage. Liability insurance covers the harm you cause to other drivers. It helps protect you from costly lawsuits. And, it is typically a requirement in most states. Yet, how much you choose is important. Here’s a closer look at what the average policy offer. Consider what liability options may be the right choice for you – or not.
The $100,000 / $300,000 Bodily Injury Policy
The most common level of liability insurance purchased by vehicle owners is this form. This presents just one component of a liability insurance policy. More specifically, this represents just the bodily injury component of liability insurance.
The first number here, $100,000, refers to the per person amount of the coverage. If a person suffers an injury you caused, the policy covers up to $100,000 of their losses related to medical bills and other claims. The second figure, $300,000, represents the total available per accident. If there is an accident with multiple people injured, the total amount the policy pays out is $300,000 in this example. Some policies also promise to compensate each injured party with $100,000, as long as it does not exceed the $300,000 limit.
Property Damage Liability Coverage
You probably also need to purchase property damage coverage along with bodily injury coverage. It is common to purchase at least $50,000 worth of property damage coverage. Again, this is a baseline. It covers damage to vehicles or other property you cause. It can help cover most of the risks your face related to property damage such as another person’s car suffering damage.
Most states have a minimum amount of liability insurance required. This may be much lower than the necessary amounts, however. The basic policy generally offers very little protection to you should an accident occur. For example, in some states, the minimum requirement is just $30,000 bodily injury coverage per person. A single accident can cause much more damage than this.
In addition, many drivers should consider expanding coverage beyond the $100,000 / $300,000 range. Having more liability insurance becomes important if you drive a vehicle that has a higher dollar value. It may also be important if you drive a larger vehicle that can cause more damage. If you live in an area with bigger risks or you just want more protection, increasing your coverage up to $1 million may be an option.
Liability insurance is an important part of car insurance. Work with your auto insurance agent to set the right level of protection for your needs. Don’t assume the minimum is really enough.