Do You Need Higher Liability Limits?

It may seem like car insurance agents try to sell you on having the highest liability limits, but don’t automatically dismiss their sales pitches. Although they might be trying to earn a little extra commission money, there is actually a good reason for having high liability limits on your car insurance policy. The number of uninsured drivers is around 15 percent, according to the Insurance Research Council.

Generally, each state in the U.S. sets its own liability limits for resident drivers. For example, most states require drivers to carry 25/50/10 insurance, which means car insurance companies pay up to $25,000 for bodily injuries (per person), $50,000 for bodily injuries per accident, and $10,000 for any property damage caused by accidents.

Carrying a low liability policy might save you some money every month, but one major car accident can exceed these figures tenfold. If you don’t have thousands of dollars available for medical injuries, you might want to consider raising your liability limits on your policy. Raising your limits can also protect your assets. Overall, having high liability limits actually lowers your risk if you ever get sued by the other driver in an accident.

At-Fault Car Accidents

An at-fault car accident makes you responsible for any and all medical injuries that arise from the accident. The other driver may sue you. You may have to pay thousands of dollars in property damage costs. Paying for medical bills and lost wages would also be your responsibility. In addition, you might have to pay court fees for the other party’s pain and suffering.

Liability Insurance for Older Vehicles

If you drive an older vehicle, you might believe that you can safely lower your liability limits. This is untrue. The age of your vehicle is not related to how much liability insurance you should carry. If you are trying to pay less each month on your policy, take off your comprehensive coverage or collision coverage instead. Your liability insurance is very important for covering medical expenses.

Liability Insurance and Assets

People with many assets should carry high liability limits. The things you own are too important to risk in a car accident. A single lawsuit can wipe out years of your hard work if you are not adequately protected. Even drivers without any assets should consider having high liability limits. If you are involved in a car accident with an uninsured driver, your liability insurance will help you pay for medical injuries.

About Brian Hendricks

Brian Hendricks is the President of Fidelity Insurance Group. Brian started Fidelity in 2003 with 0 clients. Today Fidelity Insurance Group is a Premier Independent Insurance Agency in Florida with over 3,000 families and businesses insured. Brian currently serves on advisory boards for 2 of the largest property insurance companies in Florida. Knowlege, Integrity, and Committment are his and his agency's guiding principles.
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