How Recommended Auto Insurance Coverage Levels Benefit Drivers

Auto insurance is a product that drivers put in place to avoid having to pay for damages personally following an at-fault accident. The insurance company agrees to provide up to a certain level of coverage in return for the premiums the policyholder pays.

In most parts of the United States, registered vehicles must have at least a minimum level of auto insurance coverage in place. This level of protection is lower than the level which will provide adequate coverage to a driver in most cases. Rather than buying the state minimum level of protection only, a driver should consider putting a policy in place which has the following coverage limits:

  • $100,000 in bodily injury liability coverage to pay for an injury claim made by a single accident victim
  • $300,000 in bodily injury liability insurance to pay for all injury claims resulting from the same accident (two or more victims)
  • $100,000 in property damage liability insurance to cover repairs to the other driver’s car, as well as any public property damaged or destroyed in an accident

When an at-fault accident occurs, the driver (through his or her insurance company) is responsible for paying for any medical bills, rehabilitation expenses and lost wages incurred by the occupants of the other vehicle. Once the policy limit has been reached, the policyholder is responsible for paying any remaining damage amounts personally. Choosing a level of protection which is similar to the one listed above will help to avoid this type of situation.