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HOW TO DETERMINE YOUR CAR INSURANCE LIABILITY LIMITS

Updated on March 20, 2016

As you may know, car insurance, bodily injury and property damage liability are all types that protect you in case you injure someone, damage or destroy someone’s property. Every car owner should know the liability limits required by their state and have them in consideration for the future.

Today, we are listing the steps to determine your car insurance liability limits.

  1. Determining your assets – Your insurance is meant to protect what you can lose in a lawsuit.
  2. The ages of the drivers in your household – Young drivers usually relate to more accidents that result with lawsuits.
  3. Realize that you share liability for each child until they reach a specific age
  4. Realize that your profession is also tied to car insurance, and if you have high income, you may face larger lawsuits.
  5. Have in mind that there are cars on the road that cost more than the regular $25,000 property damage limits.
  6. Realize that in case you cause a chain reaction accident, you may be liable for damage that applies to more than one vehicle.

So, with these aspects in mind, you can’t help but ask yourself: ‘How much car insurance do I truly need?’

The truth is, an auto insurance policy can contain a lot of types of coverage. The best way to choose the right one is to consult with an insurance agent offering you professional advice on the type and amount of car insurance coverage. There are 3 main types of coverage that your policy may include:

  • Liability for Bodily Injury
  • Liability for Property Damage
  • Collision
  • Comprehensive
  • Medical Expenses
  • Uninsured/Underinsured Motorist Coverage
  • Personal Injury Protection

While the bodily injury comes with average limits of $100-$300k, the property damage liability cost $50k upwards. The other coverage types are all including lesser amounts to pay in case of any damage, and are not so serious in nature.

It is important for every car owner and active driver to understand each coverage type and see that he/she has the right one to be safe on the road. Having in mind that according to a survey, 1 in 7 people does not have car insurance, it is critical that you obtain yours and be safe as soon as possible.

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