Recommended Amount of Car Liability Insurance
Some form of automobile insurance is required by all 50 states and the District of Columbia for individuals who wish to operate a motor vehicle on public roads and highways. Drivers can meet the legal requirements by purchasing the minimum car insurance levels prescribed by law, but with the rising costs of automobile repairs and medical care, the minimums may not offer sufficient protection.
Other People Are Reading
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State Minimums
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Liability insurance is typically quoted in three categories, including personal injury to a single person, personal injury for all persons and property damage. Each category is usually quoted in thousands and divided by hash marks (/). Minimum levels of liability insurance vary from state to state and range from 10/20/10 in Florida to 50/100/55 in Wisconsin. New Hampshire is only state in the union that does not require automobile operators to maintain a minimum level of auto liability insurance, as of September 2010. However, New Hampshire does require a minimum level of uninsured motorist coverage.
Bodily Injury
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The bodily injury component of car insurance is quoted in two sections, including bodily injuries sustained by one person and bodily injuries sustained by all persons involved in an at-fault accident. It is important to understand that the driver of the vehicle in an at-fault accident is not covered by her liability insurance policy. Bodily injury liability insurance covers against financial loss for medical expenses, funeral costs and legal fees. The North America Military Financial Education Center (NAMFEC) at the University of Maryland recommends drivers carry at least $100,000 per person and $300,000 per incident in bodily injury liability insurance.
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Property Damage
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The property damage component of car insurance covers against financial loss if the insured vehicle causes damage to another person's property. The damaged property may include another vehicle, a home, a mailbox, a fence or personal property inside the damaged vehicle. Property damage liability insurance also covers legal expenses in the event of a lawsuit. Property damage liability insurance does not cover financial loss resulting from damage to the insured's property. The NAMFEC recommends maintaining a minimum of $100,000 in property damage liability coverage.
Ununsured Motorist Insurance
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Liability insurance protects an at-fault driver against financial loss associated with property damage or bodily injury to others. It does not protect the at-fault driver against personal injury to himself or property damage sustained by the vehicle he was driving. Liability insurance does not protect anyone in the event of an accident caused by another party. Edmunds estimates more than 16 percent of drivers are either uninsured or under insured. The NAMFEC recommends maintaining a minimum of $100,000 per person and $300,000 per accident of uninsured/under insured motorist insurance.
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References
Resources
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