Auto Insurance Liability
To help you learn more about liability auto insurance, we've compiled a list of auto insurance liabilities. Each item in the list has a straight-forward explanation so you can read them over them carefully. A majority of the time, most auto insurance agents will explain them to you.
BODILY INJURY LIABILITY: This coverage is required in most states. It pays the driver of the other car and its passengers in the event of an accident; it covers the passengers in your car as well. This protects you against lawsuits, and is sold in standard increments that designate how much coverage you have per person in an accident, with an additional limit per accident. If you buy bodily injury coverage worth $60,000/$120,000 and get into a serious accident, each person insured to use the car would be compensated $60,000, but not over $120,000 total.
Like home insurance, how much you spend depends on how much coverage you feel you need. If you're earning $35,000 per year and don't own a home, basic bodily injury will suffice. But if you're a homeowner with money in the bank, you're going to need at least $100,000/$300,000. If you have substantial assets to protect against lawsuit, for about $200 a year more you can get an umbrella policy that covers you against all liability claims up to 1 million dollars.
PROPERTY DAMAGE LIABILITY: This coverage pays for the repair and replacement of the other guy's property damaged in a car accident. State laws require a minimum protection of $5,000. With new cars costing upwards of $20,000, $5,000 protection is probably not enough. For protection in the $100,000 range the cost to you would be roughly $30 extra a year.