March 4, 2024


If you are a car owner, chances are you understand the importance of purchasing auto insurance. Among the various risks and uncertainties that come with owning a vehicle, one of the most important aspects covered by an insurance policy is liability. Liability insurance covers financial liability for any property damage or personal injury resulting from the operation of the vehicle if you are deemed responsible for the accident.

In this article, we take a deeper dive into the importance of auto liability insurance and how it can protect you from potential financial liabilities. Read on to learn why liability insurance is essential for every responsible driver on the road.

Auto Liability Insurance Covers Your Financial Liability in Accidents

Check your insurance policy. On the first page (called the “declaration page”), you will see the amounts listed for personal injury per person, personal injury per accident, and property damage per accident. These limits might be something like 250/500/250. This means that if you caused an accident and are found liable, your insurance will provide up to $250,000 in coverage for bodily injury to any one occupant in the other vehicle, and for all occupants in the other vehicle There is a total limit of up to $500,000 for personal injury and a separate payment of $250,000 for property damage (damage to another vehicle).

remember: These are liability payments, which means the amount does not include your medical bills or any payments for damage to your vehicle. In an unexpected accident, umbrella coverage Can be a safety net for paying extra.

The above limitation might sound like a lot. If you consider yourself a good driver, you may think that you would never cause such an accident. But let’s consider, for example, how much medical claims actually cost.according to Forbes, the average claim for post-collision personal injuries in 2020 was $20,235. Now consider inflation and the possibility of a more serious accident.The American Bankruptcy Institute reports that medical debt is the number one cause of bankruptcy.

Get insights like this in your inbox. Subscribe to the central blog below.

What kind of limit should I buy?

Certain states have enacted state minimum liability limits, or minimums that require individual liability.Required in Ohio at the lowest limit Personal injury liability coverage currently pays $25,000 per person injured in any one accident and $50,000 for everyone injured in any one accident.

However, this may not be enough to provide adequate insurance against accidents. Let’s say you accidentally hit someone in traffic, injuring three people in the car, and their medical bills total $500,000. What happens if you only carry the state minimum? Your insurance will only pay up to $50,000 (the total bodily injury limit for all injured passengers). You will then be responsible for paying the rest of the bill. If you don’t have the $450,000 in cash, the court may garnish your wages, or your assets may be seized.

Don’t skimp on auto insurance; a small investment now can shield you from major financial woes in the future. By prioritizing higher coverage limits, you can protect yourself from potential wage garnishments and asset seizures in the event of an accident. Choose comprehensive coverage for peace of mind and long-term financial protection while traveling.

For additional protection, consider Personal Umbrella Policy. Please contact your independent agent to find out which options are best for you.