Have You Bought Enough Auto Liability Insurance?

Although many shoppers generally buy auto insurance in order to drive legally, it’s best to buy insurance for the coverage you need.  There is a lot that can be lost if found to be the at-fault driver in an auto accident – especially if you severely injure or kill another motorist.  Here are a few things to consider before you begin comparing quotes for car insurance.

How Much Could You Lose?

The answer to this question really depends on how much you own.  Do you own a second home or a second vehicle?  Have you been saving up for a large purchase over the last ten years?  If your coverage isn’t enough, these types of things are at risk for being taken.

Understand How Auto Liability Insurance Works:

Most auto liability policies sold are split limit policies.  For example 30/60/20 may be the limits one would select for their split limit liability auto insurance policy.

Bodily Injury Limits (30/60)
The bodily injury liability limits on this policy policy would pay $30,000 total for one person’s injuries, $60,000 total for all persons’ injuries.

Property Damage Limits (20)
This policy would also cover up to $20,000 toward property damage caused by you; paid out to the other person.

Some states require very little coverage.  The state of California requires drivers to maintain a policy with limits of 15/30/5.  Arizona requires 15/30/10.  $15,000 is a very small amount of coverage for injuries that could be caused in an accident.

Don’t get me wrong, it’s better to have some coverage than no coverage.  However, if you severely injure another motorist, hospital bills can reach into the hundreds of thousands.  With coverage of only $15,000, the family may hire an attorney to try and recover the remaining amount.  It wouldn’t take too long for a good lawyer to learn of your assets. Many people who have a lot to lose will often buy a high limit policy such as 100/300/100 with a 1,000,000 umbrella.

Next time you get a quote consider raising your liability coverage.  Remember, getting an insurance quote doesn’t obligate you to buy insurance then and there.  You may be surprised to find out how inexpensive it really is to increase limits of coverage.