How Much Auto Liability Insurance Do You Need?

Many states require a minimum limit of liability insurance, but it may not be enough to cover your full responsibility if you cause an accident.

If you cause an auto accident, your assets could be at risk. You purchase a car insurance policy with liability coverage to protect yourself if you're at fault. But how do you choose your liability limits?

Most states have a low limit of required liability insurance. With the rising costs of medical care and vehicle parts, though, these minimum liability limits are often inadequate. To decide how much liability insurance you need, start by asking yourself the following questions:

  • Do you have an inexperienced driver on your policy?
    The risk of motor vehicle crashes is higher among 16- to 19-year-olds than any other age group.

  • Do you lease or finance your vehicle?
    A lease or finance company may specify a required minimum amount of liability coverage.

  • Do you have many assets?
    The more assets you have (home, savings, investments, etc.), the more you have to lose.

Be aware of whether your insurance company offers split limit or single limit policies. The policy type will determine how much coverage you have if you're responsible for an accident.

Learn more about NJM Auto Insurance, or explore other auto insurance topics in Ask NJM.

The information and descriptions on this site are general in nature. The coverage afforded for a particular loss depends on the specific facts and the terms, exclusions, and limits of the actual policy. Nothing on this site alters the terms or conditions of any policy, as the policy controls coverage. Coverage options, limits, discounts, deductibles, and other features are subject to underwriting criteria, state availability, and effective dates. Coverage provided and underwritten by NJM Insurance Company and its subsidiaries, 301 Sullivan Way, W. Trenton, NJ 08628.

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