Bodily Injury

• Bodily injury is one component of auto insurance. Bodily injury pays for medical costs as a result of injury. Policy requirements vary per state, but policies provide protection up to a specific amount per person and per accident. For example, when a policy states that bodily injury protection is $50,000/$100,000, this means the policy will pay up to $50,000 per person or $100,000 per injury. With the high cost of medical care, injuries from an auto accident can easily exceed these amounts.
  
  

Property Damage

• Another component of auto insurance is property damage coverage. Property damage coverage pays for damages to other vehicles and other property damaged in an accident. Some states have low minimums that would not cover the value of most new cars. Considering the value of many luxury vehicles and other expensive vehicles on the road (RVs, etc.), auto owners may choose to add coverage above their state minimums to reduce risk.
  
  

Protecting Assets

• When considering purchasing additional auto insurance, auto owners should also look at their personal financial situation. Auto owners with few assets to protect have less risk from a liability lawsuit as there is little for an injured party to take. However, auto owners with considerable savings, a paid off home or expensive vehicles may need more insurance to protect these assets in the event of a lawsuit. Auto owners should also make certain their vehicle is properly covered. Auto owners who drive an expensive vehicle they cannot afford to replace out of pocket should carry enough coverage to replace the vehicle.
  
  

Umbrella Coverage

• An alternative to adding to auto insurance policies is the purchase of an umbrella insurance policy. An umbrella policy provides additional protection from liability for car accidents beyond the limits of the auto insurance policy. Not only will umbrella coverage provide an additional layer of insurance for auto claims, but for homeowner's insurance as well. Consumers can purchase umbrella coverage from many insurance companies, and the coverage does not have to come from the same company that provides the auto insurance.