Car insurance liability coverage handles – or should handle – your financial obligations to other people. Make sure your limits meet legal standards, as well as protect your other assets in case the worst should happen. At the very least, you need enough to cover anticipated bodily injury and property damage costs if you’re in an accident. There are generally clear differences between this type of coverage and other subtypes like car insurance medical coverage.
Getting Liability Car Insurance in Your State: Know the Limits
Each state requires drivers to carry a minimal amount of liability coverage. These amounts cover costs associated with bodily injury per individual, the total costs for bodily injury for all individuals in the other car and any property damage caused by you. Limits are typically quoted in the thousands. Common limits are 25/50/25 or 25/50/10.
Unfortunately these rates aren’t always enough to cover the damages or injuries that arise from a collision. When your insurance doesn’t cover the costs, other parties – and their insurance companies – can take you to court. California rates serve as a good example. As one of the leading states in the nation for new car sales, their liability limits of 15/30/5 don’t provide for much protection for drivers who total another driver’s new car.
Because of these low levels, some states require drivers to carry uninsured or underinsured motorist coverage (UM/UIM) as well as liability. This kind of policy pays for your medical bills and property damage when the other driver has no insurance or when their insurance doesn’t meet the costs of medical care or necessary repairs.
States requiring UM/UIM coverage are the following: Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Vermont, Virginia, West Virginia, and Wisconsin, as well as Washington D.C.
Raising Your Liability Coverage for More Protection
It makes sense to raise your liability limits enough to protect you in case of an accident. Normally, it doesn’t cost much to raise your policy to higher levels. Depending on your car, your area and your assets, 25/50/25 or even 50/100/50 could make financial sense without putting a noticeable dent in your monthly budget.
You can save more without the risk of being sued by cutting down on insurance add-ons or asking for discounts based on your driving profile or the way that you pay. Common discounts include lowering the number of miles that you drive, being a student in good standing, going several years between tickets, and paying through automatic withdrawal or paying a year at a time.
Is Basic Liability Insurance Enough?
Car insurance liability coverage only handles the damage done to others. You need collision and comprehensive to pay for damage to your own car, but full insurance costs enough that it’s not an option for everybody; most of the time, “comprehensive” does not imply that you will get car insurance bodily injury liability coverage – not everything is always covered unless you have verified it with your insurer.
Many financial experts caution against investing in full insurance on a cheap car. The idea is that the money you don’t pay in premiums can be saved back to pay for your next car. However, unless your policy costs more than the replacement cost of your car – and not just what your car is worth – full coverage might be your best option. If car replacement isn’t a major concern for you, make sure your liability insurance covers more than your legal obligations.