Auto Liability Limits

Auto liability limits are the maximum amount of money your insurance company will pay for damages you cause in an accident. There a

re three main types of auto liability limits:

• Bodily injury liability (BI): This limit covers the cost of medical expenses, lost wages, and pain and suffering for people you injure in an accident.
• Property damage liability (PD): This limit covers the cost of damage you cause to other people’s property in an accident.
• Uninsured/underinsured motorist (UM/UIM): This limit covers your expenses if you are injured in an accident by someone who doesn’t have enough insurance or no insurance at all.

How auto liability limits work

When you buy car insurance, you will be asked to choose your auto liability limits. These limits will determine how much money your insurance company will pay if you are sued

for damages in an accident.

For example, if you choose $100,000/$300,000/$50,000 in auto liability limits, this means that your insurance

company will pay up to:

• $100,000 per person for bodily injury liability
• $300,000 for all bodily injuries in an accident
• $50,000 for property damage liability

If you cause an accident and the damages exceed your liability limits, you will be personally responsible for the difference. This could mean losing your home, your car, or even your life savings.

Choosing the right auto liability limits

There is no one-size-fits-all answer to the question of how much auto liability you need. The amount of liability you need

depends on a number of factors, including:

• Your financial situation
• Your driving habits
• The state you live in

If you have a lot of assets, you may want to consider higher liability limits to protect yourself in case of a major accident. If you have a low income, you may want to consider lower liability limits.

You should also check your state’s minimum liability requirements. Every state has minimum liability limits that you must carry. If you are sued for more than your state’s minimum limits, you will be personally responsible for the difference.

Tips for choosing auto liability limits

Here are some tips for choosing auto liability limits:

• Consider your financial situation. If you have a lot of assets, you may want to consider higher limits to protect yourself in case of a major accident.
• Consider your driving habits. If you are a safe driver, you may be able to get away with lower limits. However, if you have a history of accidents, you may want to consider higher limits.
• Check your state’s minimum requirements. Every state has minimum liability limits that you must carry. If you are sued for more than your state’s minimum limits, you will be personally responsible for the difference.
• Talk to your insurance agent. Your insurance agent can help you determine the right auto liability limits for your needs.

Conclusion

Auto liability limits are an important part of car insurance. By choosing the right limits, you can protect yourself and your assets in case of an accident.

I hope this article helps you understand auto liability limits and how to choose the right limits for your needs.