Understanding Liability Insurance
What is Liabilty Insurance?
Bodily injury liability insurance is a part of your car insurance policy that covers the medical expenses of someone else if you are at fault in an accident, with a set limit on how much your insurance company will pay per injured person (“per-person limit”) and for the entire accident (“per-accident limit”) — essentially protecting you financially from lawsuits related to injuries you cause to others in a car accident; the “limits” refer to the maximum amount your insurance will pay out for these claims.
Key points about bodily injury liability insurance:
- How it works:
- If you cause an accident and someone is injured, your bodily injury liability coverage can pay for their medical bills, lost wages, pain and suffering, and legal fees up to your policy
- Example:
- A policy with a “25/50” limit means your insurance will pay up to $25,000 for injuries to one person in an accident and a total of $50,000 for all injuries in that accident.
- Importance of choosing appropriate limits:
- Selecting adequate bodily injury liability limits is crucial to protect yourself and FAMILY financially in case of a serious accident where significant medical costs could arise.
What factors to consider when choosing your bodily injury liability limits:
- State minimum requirements:
- Each state has minimum required bodily injury liability limits, but it’s often recommended to carry higher limits than the legal minimum.
- Net worth:
- Consider your total assets and choose limits that align with your financial situation to protect your personal wealth in case of a large claim.
- Driving habits and risk factors:
- If you frequently drive in high-traffic areas or have a history of accidents, you might want to consider higher limits
Personally I recommend at-least 100/300k in coverage or 250/500k. If you have anything else please call your agent and tell them you want to go over this and maybe ask why they never brought it up if so. This is actually your most important coverage in the policy!
