How Much Auto Liability Insurance Do You Need?
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.