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How do I know what my car liability insurance covers?

If you are a car owner, chances are you understand the importance of having car insurance. Among the various risks and uncertainties that come with owning a vehicle, one of the most crucial aspects is that your insurance covers liability. In the event that you are found responsible for an accident, liability insurance covers financial liability for any property damage or bodily injury resulting from the operation of your vehicle.

In this article, we will delve into the importance of auto liability insurance and how it protects you from potential financial burdens. Read on to explore why liability insurance is essential for any responsible driver on the road.

Car liability insurance covers your financial responsibility in the event of an accident

Take a look at your insurance. On the very first page (called the Declaration page) you will see amounts for bodily injury per person, bodily injury per accident and property damage per accident. These limits can be roughly 250/500/250. This means that if you cause an accident and are found liable, your policy will provide up to $250,000 to pay for bodily injury to a passenger in the other vehicle, up to $500,000 as a total bodily injury limit for all passengers in the other the vehicle , and a separate $250,000 to pay for property damage (damage to the other vehicle).

Remember: these are liability payments, meaning this amount does not include any payments for your medical bills or damage to your vehicle. In the event of an unexpected accident, umbrella coverage can be a safety net to cover extra costs.

The above-mentioned limits may sound like a large sum. If you consider yourself a good driver, you might think that you could never cause such an accident. But let’s consider, for example, how big a medical claim can actually be. According to Forbes, the average personal injury claim after a collision was $20,235 in 2020. Now factor in inflation and what could happen in a more serious accident. This is reported by the American Bankruptcy Institute medical debts is the leading cause of bankruptcy.

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What type of borders should I buy?

Some states have adopted state minimum liability limits, or the absolute minimum that a person must carry. In Ohio required minimum For bodily injury, liability coverage is currently $25,000 per person injured in an accident and $50,000 for all persons injured in an accident.

But this may not be enough insurance for an accident. Let’s say you accidentally cut someone off in traffic and you injure three people in that vehicle whose medical bills total $500,000. What if you only have state minimums? Your insurance will only pay up to $50,000 (the total bodily injury limit for all injured passengers). Then YOU are responsible for paying the rest of the bills. If you don’t have $450,000 in cash lying around, the courts can garnish your wages or your assets can be seized.

Don’t skimp on car insurance; A small investment now can save you from significant financial problems in the future. By prioritizing higher coverage limits, you protect yourself from potential wage garnishment and asset seizure in the event of an accident. Choose comprehensive coverage for peace of mind and long-term financial security on the road.

For even more protection, consider a personal umbrella policy. Contact your independent agent to see which options are best for you.

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