Shield Yourself with Liability Car Insurance | Coverage Made Simple

These components come with separate coverage limits, typically expressed as three numbers (e.g., 50/100/25). The first number represents the bodily injury coverage per person (in thousands), the second represents bodily injury coverage per accident, and the third represents property damage coverage per accident. For example, 50/100/25 provides $50,000 bodily injury coverage per person, $100,000 bodily injury coverage per accident, and $25,000 property damage coverage per accident.

State minimum requirements often fall significantly below what many insurance professionals recommend. In California, for instance, the minimum requirement stands at 15/30/5, which provides minimal protection in serious accidents. Considering that medical costs for serious injuries can easily exceed $100,000 and many vehicles cost more than $25,000, these minimums may leave drivers financially vulnerable.

Beyond Minimum Coverage: Determining Appropriate Liability Limits

Choosing appropriate liability limits requires evaluating personal assets, driving habits, and risk tolerance. Higher coverage limits naturally come with higher premiums, but they also provide greater protection against potential lawsuits and financial losses. Drivers with significant assets may benefit from higher limits, as these assets could be at risk in lawsuits exceeding insurance coverage limits.

Consider a common scenario: A driver causes an accident resulting in $35,000 of damage to another person’s luxury vehicle while carrying only $25,000 in property damage liability coverage. The responsible driver would need to pay the $10,000 difference out-of-pocket or potentially face legal action. Similarly, causing an accident with multiple injuries could quickly exceed minimum bodily injury limits, leaving the at-fault driver financially exposed.

Many insurance professionals recommend liability limits of at least 100/300/100 for adequate protection in most situations. This coverage level provides $100,000 in bodily injury coverage per person, $300,000 per accident, and $100,000 in property damage coverage—sufficient for most accidents short of catastrophic scenarios.