As an insurance agent, I return across individuals all the time that get into accidents and don’t have enough liability coverage.
What Is Liability Coverage?
This covers you, the driving force if you cause an accident and injure other people and cause damage to their automobile. Your insurance company will pay up to the limits of your coverage. As of Could 2009, California needs you to carry limits of at least 15/30/5. That means that your insurance company would pay up to $15,000 per person injured, $30,000 total if multiple people are hurt and $5,000 to help get property damage.
Therefore, why is it necessary to lift your liability coverage? First, it’s low cost. Increasing your liability coverage typically will not raise your price of insurance dramatically. Obviously, the exact dollar amounts are completely different with each person and each company but to extend from 15/30/5 to 25/50/25 might only be a $10 or $20 total increase.
You are not needed to possess higher limits, but you will need to consider it. After all, if you cause an accident, medical bills will get expensive quickly. Additionally, the cost to repair or replace a vehicle is not low-cost either. $5,000 could not go terribly way if you run into an upscale car… or any car for that matter.
The scary issue concerning not having enough liability coverage is you are responsible once the limits on your policy are reached. The alternative party that is injured might sue you to try to induce the rest of their medical bills obtained, and their automobile is taken care of. Would you rather cope with a lawyer and the courts trying to garnish your wages, harassing you at work or home, trying to urge the remainder of their cash from you? Or simply have your automotive insurance pay them and be done with it.