Liability Auto Insurance is designed to protect you and your assets in the case of an accident. How much liability insurance do you need? First you should understand why you need it.
Imagine that you are driving down the road and during a brief moment of inattentiveness you accidently run through a red light and cause injuries to the other driver. You get sued and the jury returns a verdict of $60,000 against you for negligently causing the accident.
If your auto liability insurance policy provides you with $25,000 in coverage, your insurance company will then write a check to the defendant for the limits of your policy, $25,000. But that’s hardly the end of it. At that point, the defendant will look to you for the difference between the $60,000 verdict and the $25,000 check he got from your insurance company. That means you will need to come up with $35,000 from your checking account or other personal assets.
Now imagine you had a $100,000 auto liability insurance policy. In the above scenario, your insurance would fully cover the $65,000 verdict and your checkbook and other assests would be protected.
In most all States, you must carry a minimum of $25,000 in liability insurance. However, as you can see from the example above, the more insurance you carry the better. It protects you from potential financial ruin if you cause an accident. Furthermore, the difference in price between a $25,000 and $100,000 is usually minimal. The insurance companies make more money on the smaller policies and some don’t write any policies at all above $50,000 in liability limits. Therefore, ask your insurance salesman to quote you prices for a variety of different coverages up to $500,000. And, buy as much coverage as you can afford and let’s hope you never have to use it.
If you have questions about auto liability insurance policies and would like to speak with an attorney, call the Kerr Law Firm. From our main office in Hilton Head Island, South Carolina we represent injured persons in South Carolina and Georgia.