Are Required Auto Insurance Coverage Limits High Enough?

Many states have set required auto insurance coverage limits for registered vehicles. The exact level of coverage required by law varies from jurisdiction to jurisdiction, and in some states it is relatively low. Drivers living in these states who buy a basic, no-frills policy with the minimum level of protection required by law may be able to get low rates, but they may find that they don’t have enough protection to pay for damages they are responsible for causing in a serious accident.

Unless a car insurance buyer is newly licensed and has few assets to protect, the minimum level of auto insurance coverage is probably not high enough. A person who has accumulated property and financial assets will want to make sure that they are adequately protected from losses stemming from an at-fault accident. To accomplish this goal, a driver should consider putting at least $100,000 in bodily injury liability protection in place to pay for a damage claim made by one accident victim and $300,000 to pay for all injuries and damages resulting from the same accident.

Property damage liability protection is a legal requirement in most parts of the United States. The recommended level for this type of coverage is $100,000. Not only is it used to pay for the costs associated with repairing the other driver’s vehicle following an accident, but it also pays for repairs to public property damaged in the incident.