Liability –Automobile liability insurance is financial protection for a driver who, while operating a vehicle, harms someone else or their property. Automobile liability insurance only covers injuries or damages to third parties and their property.
Example: You’re approaching a red light and slip on black ice and run into the intersection and t-bone a car in their driver’s door. The driver loses part of his arm and sues you in a court of law for $100,000. Your auto insurance company will send their attorney’s to defend you in a court of law. After all is said and done, the driver is awarded $60,000 in damages in which it’s up to you to pay. This is where your liability comes to play.
The state minimum is 20/40/10. The 20 means your insurance company will pay up to $20,000 per person if you hurt them in an accident. The 40 stands for $40,000 and is the maximum the insurance carrier will pay out per accident. The 10 is for $10,000 maximum in property damage the insurance will pay out.
In this scenario, your insurance carrier would pay out $20,000 and you will have to come up with the remaining $40,000.
$60,000 damages awarded victim
$20,000 maximum amount insurance will pay
$40,000 amount you must come up with
So you can see that having the state minimum really isn’t enough. We recommend 100,300,100 to be the minimum amount a person should have, and it may only increase your insurance by a little each month. But is well worth it if you hurt someone in an accident. Call us and we can help.