What is Liability Insurance?
Liability insurance is a type of car insurance that states require to protect other drivers should you cause damage to their person or property. The other side of the liability coin is what do you have to lose?
Things to Consider When You’re Shopping for Car Insurance
Most states require drivers to have some amount of this type of auto insurance in place. Yet, state minimums are usually very low, especially when you consider the costs of vehicles these days. In some cases, they require so little coverage that you still face significant exposure to risk. For instance, in the great state of Ohio the required liability is $12,500/$25,000/$7,500. This means damage you cause to people up to $12,500 per person up to $25,000 per accident and $7,500 for fixing their property (vehicles, garage doors, mailboxes, etc.). How much liability insurance do you need, then?
Know the Limits and the Risks
Now, imagine a single accident. You caused damage to another person’s vehicle. The vehicle cannot be repaired; the insurer totals the vehicle. Does that $7,500 required by Ohio law really cover the full cost of a new vehicle for that driver? In most cases, the answer is no. You might, therefore, owe the driver to make up the difference. Property damage to a third party’s property may also apply. As you can see, bare minimum coverage is typically too little to provide adequate protection in a minor collision with an expensive car. Then consider medical bills caused by the accident. Hospitals and emergency care can add up quickly too. Then there are multi-car accidents to consider and incidents with passenger vans/school buses/etc.
What Is the Recommendation Then?
While there are some basic recommendations by auto insurance companies, insurance agents can give you the options when you talk to them. It is for you to decide what coverage fits your needs. Do you just want to be legal or are you concerned about your assets too? For example, the average damage in Richmond, Virginia or Austin, Texas may be higher than someone in the Fort Wayne, Indiana or Topeka, Kansas simply due to the costs of repairs.
Car insurance companies often recommend the following protections:
- $250,000 for injuries per person/$500,000 for injuries in total per accident
- $100,000 for property damage
The next step down that is very common is:
- $100,000 for injuries per person/$300,000 for injuries in total per accident
- $100,000 for property damage
Some drivers wish to choose something in the middle between state requirements and the above limits. It pays to take into consideration all the risks. It’s also important to consider your situation.
Consider What They Could Get from You
Another way to see the value of increasing your auto insurance liability coverage is to look at what you could lose. The accident occurs, your insurance company pays out the maximum, and yet there are still losses not compensated for the other party. They could sue you for the unpaid losses. Could you lose your home or other assets to pay off those costs? What if someone dies in such an incident? The losses for loss of life can be extremely high. While it may seem scary, it is a reality worth considering. Having car insurance with enough liability protection is critical in these instances. Don’t overlook the importance of purchasing enough protection.
Whatever coverage you decide upon, Solo Insurance® is here to help you get it at our best possible rate. We write the higher limits and state required limits in Georgia, Illinois, Indiana, Kansas, Louisiana, Missouri, Nevada, Ohio, Oregon, Texas and Virginia.
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