#liability car insurance
Car Insurance – How Much Is It? How Much Do I Need?
When it comes to liability coverage for your auto insurance, it is recommended that you purchase the most you can afford. Liability coverage on your car insurance policy pays for damage you cause in an accident to other people or other property. (More information on the different types of liability coverage here )
How Much Is Auto Insurance?
Currently Insured? Yes No
We looked at data from CarInsurance.com and a handful of states’ Departments of Insurance data and saw that annual premiums are on the rise in most US states. The average cost of insurance for automobile owners has generally risen, Arkansas, Georgia, North Carolina, and Virginia being the exceptions. These quotes for car insurance in select states in the US will give you a good estimate for the annual average cost of car insurance.
Is the minimum liability coverage in a standard auto policy enough?
The minimum coverage required by law varies depending on the state you live in. It’s not all you should have, however. The overall cost of an accident can exceed the liability limits on a driver’s policy. When that happens, the driver’s personal assets are exposed, and can be seized in a lawsuit to pay for the rest of the claim.
Patti Clement, First Vice President of HUB International in New York, NY, said, “Make sure that you purchase the appropriate liability coverage, not the minimum available. If there is an accident, and you have split limits and do not have good coverage, you will be out of pocket, whatever the damages are, over and above those limits for bodily injury and property damage.”
How much liability coverage do I need on my car insurance policy?
“I urge prospective clients to buy as much liability coverage as they can reasonably afford, preferably in excess of your total assets and then some,” advised Kristofer Kirchen, President of First Florida Insurance Network of Central Florida. “The reason is that regardless of what your assets are, you have no control over who gets injured or the extent of that injury.”
Is there additional room in your budget to accommodate more coverage? It is rather impossible to foresee what accidents may happen, and how much exposure you’ll have. It is however, straightforward to cap that exposure at the total value of your assets with some room for growth. Tally the value of your house, automobiles, investments, retirement accounts, banking accounts, and other property with a buffer.
At the very least, motorists are required by law to carry the statutory liability protection or proof of financial responsibility (in certain states). “If pressed by someone who cannot afford more, I would say that they should get at least 25/50/25, but I reiterate that people should buy as much as they can afford,” recommends Kirchen.
If you’re interested in looking up what the minimum coverage requirements are in your particular state, look no further. In the table below you’ll see three numbers listed in the “Coverage Requirements” section. The first two numbers respresent the bodily injury liability requirements and the third number references property damage. For example, in Alabama $25,000/50,000/25,000 means that the insurance company will cover each person involved in an accident up to $25,000 each or $50,000 per accident. Additionally, the insurer will cover up to $25,000 (the third number) for any property damage you cause.