There are laws and regulations in each state that tell you how much auto insurance each vehicle needs. While you must carry the minimum required by these laws, it might not be enough to truly protect you if you are ever found to be at fault in an automobile accident. Before you settle on the minimum insurance required so you can save money on your monthly premiums, you need to consider a few things:
Liability Coverage
Liability coverage is the amount your auto insurance company will pay for injuries or damages caused by you. The coverage amount for injuries are coverage has two caps, per person and then for the whole accident while the damage amount needs to cover all damages in the crash. For example, if your coverage is listed as 25/50/15 the insurance company will pay up to $25,000 for one person's injuries and $50,000 for all medical bills from the accident. It will also pay up to $15,000 for damages done to property, including the other vehicle. However, it is important to understand that liability coverage does not include any injuries or damages done to you or your property. It will also not pay the medical bills for passengers in your vehicle if you are found to be at-fault for the accident.
Being Sued
If you are at-fault for the crash and your insurance coverage is not enough to pay for all the medical bills and damages, you can be sued for the remainder. While you may feel that you do not have any assets or enough income to be sued, this is not always true. The other party can take you to court. If you do not have the money to pay the difference, the judge can put a judgment against you. This could cause a lien on your home or garnishment of your wages.
Extra Coverage
You should consider having higher limits to your liability coverage and purchasing personal injury protection to ensure that you and any passengers will have the medical expenses paid. If your car is worth more money than you care to spend to replace it, you should consider buying collision coverage as well. If you are still making payments on the vehicle, the loan holder will probably I insist on collision coverage to protect their money.
Some states or municipalities are tougher on accident lawsuits. While some areas may not garnish your wages if you are not making a reasonable income, others may. It is a good idea to talk with your insurance agent and an experienced motor vehicle accident attorney to get an idea of what may happen if you do not carry enough insurance to pay for all bills from a crash. The whole idea of insurance is to protect you from having to go into a financial loss. Don't just settle for minimum coverage if there is a chance you could be out much more than the added cost of your premiums. It is easier to pay a bit more each month than to have a huge judgment against you.
Share1 October 2017
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