How to Evaluate Auto Insurance Liability Coverage Guidelines

Auto insurance liability coverage guidelines are put in place by states lawmakers to provide consumers with a minimum level of coverage they need to have in place. This type of insurance is bought to shield the policyholder from having to pay for damages caused in an at-fault accident personally.

These levels are relatively low and limiting liability protection to this level of coverage is only a good choice for people who have recently obtained a license or who have limited assets to protect. The insurance company will only pay out up to the policy limit the customer has bought. If the accident is a serious one and the driver doesn’t have enough protection to pay for the personal injuries and property damage caused, he or she must pay the difference personally.

The coverage guidelines are meant to be used as a starting point when looking for auto insurance. A driver who has accumulated assets should consider a much higher level of protection than simply limiting his or her coverage to the minimum level of protection required by law. Experts recommend a minimum of $100,o00 in bodily injury liability coverage to compensate one accident victim and $300,000 to pay for all injuries and damages stemming from the same accident.

At least $100,000 in property damage liability protection should also be considered to repair the other driver’s vehicle, as well as any public property damaged in the accident. The cost to repair buildings, sheds, guard rails, sidewalks, fences or sign posts can add up quickly and this level of protection should provide adequate protection to a policyholder.