November 17, 2010

Determining The Right Liability Limits For Your Auto Insurance Policy

Liability insurance serves two main purposes; to protect drivers from financial loss if they injure another person, or to protect against financial loss if they damage another person's personal property. Without liability auto insurance, a motorist will be fully responsible for paying vehicle repairs, medical expenses, or even funeral expenses. When you shop for auto insurance online, you can compare different quotes for different levels of liability coverage.

Each state in the country has the power to state what their minimum liability limits are. This means that each driver in that particular state must carry at least this amount of liability insurance in order to legally drive. Of course, the higher the limit on your auto insurance policy, the higher your premiums will be. It is important to keep in mind that paying a few extra dollars in insurance premiums a year can save you from a potentially damaging lawsuit that can amount up to hundreds of thousands of dollars in the future should you cause a serious or fatal accident.

There are many other aspects to consider when you determine the liability limit you want to have on your auto insurance policy. For example, if you have several drivers in the household, especially younger drivers, there is a higher chance that one of you will be involved in an accident. If you are the registered owner of a vehicle, you are responsible if any one of them is involved in an accident with your vehicle. This means that you will most certainly be named in a lawsuit and if you do not have an adequate amount of liability insurance, you will have to pay for these expenses out of your own pocket. Victims may also be more inclined to sue you if you are perceived to be wealthy or if you hold a high profile position in the community.

Another important aspect to think about is if you cause an accident that involves several vehicles, you may be responsible for the damages to all of them. A low liability limit may not cover all damaged property or injuries for all people involved.

Remember, liability insurance is a mandatory coverage that is in place to protect drivers from having to pay out large amounts of money for property damages or injuries that they have caused in an automobile accident. If this insurance is not in place, then a person may very well be paying for these expenses for many years to come. Always inquire about the minimum limits in your state of residence when you shop for auto insurance online. This is the best place to start when you determine which limits are right for you.