Why You Should Consider Higher Auto Liability Insurance Limits
When shopping for insurance, most people are typically focused on getting the lowest possible premiums. While lowering your liability insurance limits may be an enticing way to lower your monthly insurance premiums, you may be leaving your financial security at great risk over saving just a few dollars.
What are Auto Limits?
The liability coverage on your auto insurance policy pays for any bodily injury or property damages you may be responsible for after you’re in an accident. You may hear your insurance agent say, “your current auto limit is 50/100/50.” The three numbers in your auto limits represent the maximum amount your insurance company will pay as a result of an auto accident you cause. For example, here is how 50/100/50 limits break down:
50 Bodily Injury Coverage = Up to $50,000 per person for injuries
100 Overall Maximum Coverage = Up to $100,000 will be paid out for injuries total per accident
50 Property Damage Coverage = Up to $50,000 (in total) per accident will be paid for the damages you do to the property of others
Why should you increase your auto limits?
Insufficient auto liability limits can leave you paying out of pocket for damages after an accident. If policy limits are exceeded after an at-fault accident, you are legally obligated to pay for any remaining damages. Your insurance company is only liable to pay up to the limit dictated by your auto policy. Many accidents involve either multiple drivers or multiple vehicles. If your benefits are capped at $100,000 of bodily injury per accident, and there are multiple individuals who are injured, you most likely will not have enough coverage to protect yourself from being obligated to pay for injuries sustained. Many vehicles on the road today far exceed a price tag of $50,000. By carrying lower liability limits, you may be leaving yourself on the hook for damages above your coverage limit. If there are multiple vehicles involved, $50,000 of property damage coverage will only be a drop in the bucket for what you could potentially be responsible for in the end.
Additional reasons to increase your auto liability coverage:
You have a teen driver on your auto insurance policy: Teen drivers represent a higher risk of accident due to their lack of driving experience.
You own a home or other properties: If you’re found at-fault for an auto accident where the judgement exceeds your policy limits, you must pay the remainder out-of-pocket which could compromise assets such as your family home or vacation property.
You have investment accounts such as 401k's or IRA's: If you're found at-fault for an auto accident where the judgement exceeds your policy limits, you could be placing bank accounts, CD's , or investment accounts at risk of being garnished or seized to pay for damages. There are no federal protections in place shielding your retirement assets from seizure in a lawsuit.
You have multiple drivers on your auto policy: Every additional driver on your auto insurance policy increases your risk of accident.
You participate in a carpool: If you help on a regular basis by driving your children’s friends to and from school, your total exposure for injuries in the event of an accident is increased.
You drive a large truck or SUV: Larger vehicles have the potential to cause more property damage and/or more bodily injury in the event of an accident.
Let Selby Insurance review your coverage needs
When it comes to insurance, you need more than a great price. You need advice. Selby Insurance can help review your current coverage limits and explore options for better protecting your liability exposures. In the end, you may learn that having the higher auto liability limits may cost considerably less than what you think. We help clients in Jonesboro review their liability limits every day. Give us a call at (870) 336-2121 or email tobyselby@selbyinsurance.com. Stop by our office anytime in Jonesboro, AR at 2216 Wilkins Avenue to discuss your auto insurance liability limits.
