Liability Insurance and the Basic Limits
The most basic type of insurance that a person can get is liability insurance. In most states you are required to have insurance to be able to drive legally on the road. Liability insurance is the most inexpensive type of insurance that will allow you to drive legally. Liability insurance only covers other vehicles and persons in those vehicles if you are in a car accident.
When people speak of the basic limits of liability they are referring to the lowest insurance policy a company has to offer. Although it varies from company to company, the minimal amount of coverage is usually $25,000 for property and $50,000 for injuries. This is usually displayed in a policy as $25,000/$50,000. This means that the insurance will cover up to that much in property damage and injury however if the accident causes more damages then your policy will cover you are at risk of being sued for the rest.
There?s another type of insurance that will allow you to cover your vehicle in the event of an accident called full coverage. If you have a car that you are paying off then you will be required to have full coverage on it until it?s paid off. Full coverage is also handy if you can?t afford to repair your car or buy a new one in the event of an accident. Both full coverage and liability insurance have coverage that range from as little to $25,000 up into millions of dollars in coverage.
By having full coverage and higher coverage limits, you will have less to worry about in the event of a serious accident. In most small accidents basic liability will cover the property damage. However if you get into a serious accident with only the basic limits of liability then you will be liable to pay the difference. Thus it pays to have higher insurance coverage so that you don?t end up owing tens of thousands of dollars in damage and hospital bills.
As you might expect the higher limits you have the more expensive your insurance premium will be. However your premium can also be affected by your age, driving record, and type of car. Also since medical attention is more expensive than property damage the injury part of your liability insurance will usually be double what the property damage coverage is.
Driving without insurance is risky and illegal in some states. It?s best to have even the basic limits of liability to protect yourself. If you have a newer car then you will want to have better coverage. In most cases you will want to have collision and comprehensive insurance to protect your car in the event of an accident, theft, or bad weather.
Finding the right type of insurance for a vehicle can be a difficult and long task however it?s a very important one. If you?re unsure about what type of insurance would be best for you then you should consult one or several insurance agents and get their recommendations.
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