Are you holding enough auto liability coverage? If not, you could be financially on the hook for any expenses over and above the limits of your insurance policy if you are found at-fault for a car accident. You don’t want to be left with a huge bill to pay.

What is the importance of having enough auto liability coverage?

What is liability coverage?

“Liability” coverage protects you if you are found liable for another person’s damages. If you get into a car accident and you are found at-fault or at least partially at-fault, this means you are responsible for the other driver’s damages. Your liability coverage is the part of your auto insurance policy that would step in to cover the expenses of the other party or parties.

There are two types of auto liability coverage: bodily injury liability and property damage liability.

Bodily injury liability can cover expenses related to injury of the driver or their passengers arising from an accident you cause. This would cover medical bills, pain and suffering, rehab costs, lost wages, and other associated costs for these individuals. This can be one of the most expensive costs if you are found at-fault for an accident where another party is injured.

Property damage liability can cover damages caused to another person’s property in an accident. This could include their car, a mailbox, a telephone pole, or other physical structure that may be damaged as a result of an accident you cause.

For explanations of additional coverages check out A Simple Explanation for Auto Insurance Coverages

What happens if I don’t have enough auto liability coverage?

If you are found liable for another party’s damages, you could be facing serious costs.

A bodily injury claim can be particularly expensive, potentially costing hundreds of thousands of dollars. You could be responsible for any medical bills, ambulance costs, lost wages, legal fees, pain and suffering, and even funeral expenses if they are needed.

With regards to property damage, a totaled car can also cost several thousand dollars depending on the type of vehicle involved. Even small dents can be expensive to repair.

If you didn’t have liability insurance at all, you’d be responsible for all these costs. That’s why most states require drivers to carry a minimum amount of liability coverage. Otherwise, your finances could be completely turned upside down in one instant.

Even if you have both forms of liability insurance, it still might not be enough. Let’s say for example your property damage liability limit is $20,000, but you are found at-fault for $30,000 worth of damage. That leaves $10,000 in damages over your policy limit, for which you would be personally responsible to pay.

 The other party could sue you personally, which would put your assets at risk.  If the other party obtains a judgment, they could put a lien on your home, garnish your salary, or take other steps to recover their loss. While not all states will take the same actions, certain states might even suspend your license if you aren’t carrying liability coverage. [1] For example, according to the Florida Highway Safety and Motor Vehicles, in the state of Florida your license can be suspended if you are at-fault in an accident and you aren’t covered for the state’s minimum required liability coverage.

That’s why you want to make sure your liability limits are high enough to protect you in worst-case scenarios. You want your insurance company covering the costs of injuries and damages you may cause, so you don’t end up personally responsible.

How can you protect yourself?

Raise your liability limits.

The best thing you can do to protect yourself is raise your liability limits.  For example, if you have assets like several vehicles or even multiple homes, we recommend higher limits than what the state minimums usually require.  State minimum liability coverage limits can be inadequate to protect you if you have these types of assets.

Talk to a licensed insurance advisor to discuss your liability limit options today at 844-282-6808.

Lower your costs.

A lot of people don’t have enough liability insurance because they don’t want to pay the additional premium. That can feel like a fair concern because liability rates can sometimes be the highest part of your auto insurance- but that’s because it’s one of the most important coverages.

If you need to lower your auto insurance costs, consider changing other parts of your insurance. For example, you might want to raise your deductible for collision and comprehensive insurance. This means you’d pay more out of pocket if you damaged your own car, but with higher liability limits you would have better protection in the event you caused harm and/or damage to someone else.

You might also want to look into insurance discounts, like safety discounts or bundling (insuring both your auto and home insurance, or other types of policies with the same insurer). These can help lower your costs as most insurance companies provide multi-policy discounts.

Conclusion

Bodily injury liability and property damage liability will help protect you in the case you are found at-fault for another person’s damages in an accident. Don’t be caught without sufficient liability coverage which could cause you to have pay excessive costs out of pocket.

 
Get a quote today by calling 844-282-6808 to speak with an insurance advisor who will help you compare auto liability insurance rates and find the right coverage for your needs.

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