What is the least amount of auto insurance coverage you need?
Liability insurance encompasses the minimum amount of auto insurance coverage you are required to carry by law. Liability insurance only covers injuries and property damage to those outside of your vehicle if you caused an accident. Liability insurance does not cover your vehicle or any individuals, including you, inside your vehicle at the time of an accident. The minimum amount of coverage you are required to carry legally is determined by your state of residence.
Liability insurance coverage is usually assigned in three parts; the maximum payment amount for personal injury that will be issued to a single individual, the maximum amount of payment that will be issued for personal injury in total for the accident, and the total payment amount that will be paid for property damage. The minimum liability coverage amounts assigned by the state are what is required for you to drive your car legally. If you choose to only insure yourself for the minimum and the damages and injury incurred during the accident exceed the insured amount, you will be responsible for paying the remainder out of pocket.
It is important to protect your financial future. If you cause an accident and do not have enough insurance to cover all of the expenses, the injured party can pursue payment from you. You may want to consider insuring yourself above the legal minimum in your state. Although the insurance rates may be slightly higher, it could be worth the peace of mind. Ask your insurance company what the rates would be if you chose higher coverage amounts. The rate difference may not be too significant.