Law in 47 states in the United States requires liability auto insurance. Should you, as a driver, be judged legally liable for an auto accident, your liability auto insurance will be the coverage that pays for any bodily injury and property damages to others as a result of that accident. Bodily injury damages include things like medical costs, “pain and suffering”, rehabilitative care and lost income for the injured person or persons. Property damage includes both damage to the automobiles involved in the accident, as well as external property damage to yards, sidewalks, mailboxes, fences, etc. Liability auto insurance also pays for things defense and court costs.
Having auto insurance is a social responsibility, and people who drive without insurance – or without the ability to pay for any accidents caused – put everyone else at tremendous financial risk. In these hard-pressed economic times, if you must drive a car and your budget is very limited in making your auto insurance decisions, probably your best investment will be in purchasing liability auto insurance. One of the first things you need to do before you make any kind of financial commitment to an auto insurance provider is research your state’s minimum requirement. Ultimately, it is up to you to decide how much insurance you really need and how much you are prepared to spend.
However, while liability auto insurance can help protect you from the financial burdens of a serious fender-bender, if the total of a given loss in an accident is higher than the amount of your liability auto insurance, you may be responsible for paying out of your own pocket for the rest. For instance, if you are in an accident, judged guilty of causing $50,000 worth of damage, and have an insurance limit of $30,000, you can be sued for the remaining $20,000. For this reason, you may want to consider purchasing more liability coverage than your state requires.
Split Limits are a series of three numbers that most auto insurance policies use to describe the amount of liability coverage. For instance, if your coverage reads 25,000/50,000/25,000, the first number ($25,000) is the maximum the auto insurance will pay for bodily injury to one person in an accident. The second number ($50,000) is how much the auto insurance will pay for bodily injury, no matter how many people are injured in a single accident. The last number ($25,000) covers the maximum amount to damages to someone else’s property. A “combined single limit” (or CSL) number is the maximum liability coverage for bodily injury and property damage combined, no matter the number of people involved or amount of property damage. However, all limits are based per accident.
When it comes to choosing a liability auto insurance provider, you need to know your assets and what you can afford to lose in case of an accident. It is much better for an auto insurance provider to be responsible than for you to be personally responsible if any auto accident should happen.
