How Much Auto Liability Coverage Do I Need?

Liability Insurance coverage is required by most states. It protects you in an accident in which you are at fault. It is broken down into protection for personal injury to others and property damage.

Coverage is usually listed by three numbers, such as 250/500/250. This is called split limits coverage, and refers to the amount paid out for each single accident. It is broken down as follows:

• Up to $250,000 to cover bodily injury to another individual
• Up to $500,000 to cover bodily injury for all people in the accident
• Up to $250,000 to cover property damage. This includes autos and other property.

25 years ago 100/300/100 was considered the standard coverage that most people obtained. It is amazing to me that many people today are still only getting this amount of liability coverage! The cost of medical expenses and lawsuits has increased dramatically in the past 25 years. Even a young adult with few assets can have wages garnished and their life ruined. Don’t skimp on this coverage just to save a few dollars.

Also consider for a moment the property liability to which you will expose yourself, if you cause a multi-car accident. The property damage alone for two or three cars might easily amount to more than $100,000. If a semi-truck and trailer is involved in the accident, the property damage total will be enormous. You will find that increasing the amount of property liability protection is very inexpensive. Going from $100,000 to $250,000 will cost very little, maybe only $10-$20 per year, but it is well worth it!

In my opinion, a good insurance agent will not recommend any less than 100/300/200. I recommend at least 250/500/250. An agent should have your best interests at heart and not only be interested in selling another policy. Don’t be afraid to ask questions if you are not clear about her recommendations.