Don"t Make the Mistake of Settling For Minimum Auto Liability Limits
Let's face it.
Auto insurance is an intangible product that we may never, or at least very seldom need.
As such many consumers view it as a "necessary evil" and therefore it is best to spend the least amount possible to insure one's auto.
The insurance industry itself fuels this kind of thinking with its "save money with us" tagline on virtually every auto insurance advertisement.
Insuring one's auto with only the minimum liability coverage as mandated by state law is risking a potential financial disaster.
Most people don't even know the liability limits of their policy, so let's dive into it here.
Take a look at your auto policy "Declarations Page"- it will be the first page of the policy.
The first line explaining the liability limits will say something like: BI/PD 25/50/10.
The BI/PD stands for "Bodily Injury/Property Damage" and the numbers following that are the liability limits (in thousands) of your policy.
In this scenario the first number means that up to $25,000 will be paid by the insurance company for bodily injuries sustained by an individual in an accident in which you are negligent.
Think about it.
If you are unfortunate enough to be responsible for seriously injuring a person in an auto accident.
That person will ride an ambulance to the hospital, have surgery, spend a few days in the hospital, and afterward need rehabilitation.
That $25,000 policy limit for bodily injury will be spent in quick fashion, and you will be held personally responsible for paying the remainder.
Depending on the laws of your state you could be forced to sell assets (house and car), have your wages garnished, and so forth.
Again in this scenario the second number ($50,000) is the total amount that will be paid by the insurance company if you are negligent for injuring more than one person in the accident.
However no more than $25,000 will be paid for any one person injured.
The third number ($10,000) is the limit the insurance company will pay for property damage as a result of your negligent actions in this scenario.
If you are unlucky enough to hit a newer high end auto, or collide with mulitple vehicles, or take out a traffic signal box, that $10,000 limit could easily be surpassed.
Again you may find yourself owing thousands of dollars out of your own pocket.
If you work with an insurance agent talk to that person about the liability limits on your auto policy.
If you buy online without using an agent check to see how much the premium increases if you raise the limits on the policy.
You will probably find that the increase in premium is minimal when compared to the extra level of protection afforded.
Don't make the mistake of settling for minimum liability limits on your auto policy.
The few dollars saved now may cost you tens of thousands down the road.
Auto insurance is an intangible product that we may never, or at least very seldom need.
As such many consumers view it as a "necessary evil" and therefore it is best to spend the least amount possible to insure one's auto.
The insurance industry itself fuels this kind of thinking with its "save money with us" tagline on virtually every auto insurance advertisement.
Insuring one's auto with only the minimum liability coverage as mandated by state law is risking a potential financial disaster.
Most people don't even know the liability limits of their policy, so let's dive into it here.
Take a look at your auto policy "Declarations Page"- it will be the first page of the policy.
The first line explaining the liability limits will say something like: BI/PD 25/50/10.
The BI/PD stands for "Bodily Injury/Property Damage" and the numbers following that are the liability limits (in thousands) of your policy.
In this scenario the first number means that up to $25,000 will be paid by the insurance company for bodily injuries sustained by an individual in an accident in which you are negligent.
Think about it.
If you are unfortunate enough to be responsible for seriously injuring a person in an auto accident.
That person will ride an ambulance to the hospital, have surgery, spend a few days in the hospital, and afterward need rehabilitation.
That $25,000 policy limit for bodily injury will be spent in quick fashion, and you will be held personally responsible for paying the remainder.
Depending on the laws of your state you could be forced to sell assets (house and car), have your wages garnished, and so forth.
Again in this scenario the second number ($50,000) is the total amount that will be paid by the insurance company if you are negligent for injuring more than one person in the accident.
However no more than $25,000 will be paid for any one person injured.
The third number ($10,000) is the limit the insurance company will pay for property damage as a result of your negligent actions in this scenario.
If you are unlucky enough to hit a newer high end auto, or collide with mulitple vehicles, or take out a traffic signal box, that $10,000 limit could easily be surpassed.
Again you may find yourself owing thousands of dollars out of your own pocket.
If you work with an insurance agent talk to that person about the liability limits on your auto policy.
If you buy online without using an agent check to see how much the premium increases if you raise the limits on the policy.
You will probably find that the increase in premium is minimal when compared to the extra level of protection afforded.
Don't make the mistake of settling for minimum liability limits on your auto policy.
The few dollars saved now may cost you tens of thousands down the road.
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