Drivers who are looking for insurance should keep in mind that the recommended coverage for auto insurance and the minimum level of coverage required in the state where they live are two different things. Each state has determined the minimum amount of liability coverage that drivers must purchase to comply with state law. A person who is looking for coverage can buy a policy with a higher limit if he or she wishes to do so.
Use the minimum coverage requirement as a guideline only. Buying a policy which only offers a basic level of protection may be less expensive, but consumers need to realize that they are leaving themselves open to having to pay for damages following an accident personally. The insurance company will cover damages in an at-fault accident, but only up to the policy limit the driver has chosen.
Before buying a policy, a driver should consider the level of assets that he or she needs to protect and then buy a policy which can provide enough coverage to protect them. The more assets the policyholder owns, the higher the policy limit should be.
A liability policy with a limit of $100,000 to pay for one person’s injuries and $300,000 to compensate multiple victims of the same accident is not not unreasonable, given the ever-rising cost of medical care. Ideally, a driver should buy as much coverage as he or she can afford.