Car insurance buyers need to consider the effect of low liability on auto insurance before making a choice about how much protection to buy. In most parts of the United States, drivers must buy at least a set level of liability (bodily injury and property damage to comply with state law.
A driver who buys only the minimum amount of coverage required is doing what he or she needs to do to stay legal, and it may help to keep car insurance costs down. As a rule, the more coverage a driver has in place, the more he or she will pay for it.
Many consumers are looking for ways to keep costs down, and it may be tempting to limit the level of liability coverage to do so. Before making that choice, a driver needs to consider the effect of low liability on auto insurance protection. The insurance company will only pay out on damages up to the policy limit the policyholder has chosen. In the case of a serious accident or one with multiple victims, a policy with a limited level of protection may not be enough to pay for the damages the victims are claiming.
Buying a policy with a low liability limit may be the right choice for a new driver who has limited assets to protect. As a person accumulates more things, the level of auto insurance he or she has in place should increase as well to lower the risk of having to pay for damages personally.