How much auto liability insurance do I need?

importance of having enough auto liability insurance - front end of black BMW

People often wonder just how much auto liability insurance they need to have. Consider this real-life incident: Recently a driver in Illinois suffered a medical emergency behind the wheel and crashed his full-size pickup truck right through the wall of a coffee shop. In addition to injuring several people, his truck caused major structural damage to the building and destroyed a car in the drive-through lane that he hit on the way in. Fortunately, no one was killed.

This harrowing and extremely destructive event illustrates why it is so important to have enough auto liability insurance.

If the pickup truck driver had bodily injury liability insurance, presumably it would cover at least some of the medical claims by those injured inside the restaurant as well as from the driver of the impacted car in the drive-through lane. Let’s hope he had enough coverage. Assuming the driver had a property damage liability policy, it should cover at least some of the damages to the trashed coffee shop and the wrecked car in the drive-through lane. But was the coverage enough, or will the driver be responsible for huge out-of-pocket expenses that he may have no hope of ever being able to pay?

State-required auto liability limits

Auto liability insurance is required by law in nearly every state. In Illinois, for example, residents must have bodily injury liability, property damage liability and uninsured motorist bodily injury coverage. Here are the Illinois minimum requirements:

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per incident
  • $20,000 property damage liability per incident
  • $25,000 uninsured motorist bodily injury coverage per person
  • $50,000 uninsured motorist bodily injury coverage per incident

Illinoisans, now you know what you are required to have, but is it enough? What if you drive your 2002 Toyota Camry into someone’s new BMW 340 Gran Turismo and it is totaled? With today’s expensive technology-infused cars, your $20,000 property damage liability limit will most certainly not be enough to cover repairs to the BMW (which probably cost 20 times your Camry, by the way!). Guess who has to come up with the difference? That’s right, you do, out of your pocket.

What if the BMW driver and passengers sustain serious injuries? Your total overall coverage of $50,000 in bodily injury liability per incident most likely will fall wildly short. Again, that leaves you on the hook. After the insurance issues are settled, the BMW driver could take you to court to recover the rest of the costs of the injuries and damages.

Consider your assets and choose wisely

Based on the real incident at the coffee shop and the all-too-possible scenario with the BMW, it might be wise to not go with the lowest possible coverage required. Consider carrying enough liability insurance to protect your assets, including your home and savings. Another thing to consider is whether an umbrella policy might be smart for your family.

Remember, the goal is to avoid facing excessive or unaffordable out-of-pocket costs if you get into an accident. Talk to your family, consider your needs and what assets you need to protect. Then contact your independent agent, who can walk you through your current coverage and help you make a change if needed. Your agent can help you settle on the appropriate liability limits to provide the financial protection you need for the most affordable price.

by Kris A. Mainellis

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