WEDNESDAY, JULY 17, 2013
When you look are your auto insurance "Declarations" (Dec. page) you see a list of numbers with designations such as "Bodily Injury, Property Damage, Medical, OTC (Other than Collision, etc." Each of those designations is a different layer or type of insurance. The entire package is designed to do two things, (In simplest terms) 1. Protect another person if you should be responsible for their loss and 2. Protect you from financial loss by repairing your car if it is damaged. There is much, much more, but that will be for another blog entry.
When you tell your agent your want "Liability Only," you are essentially saying," I want to meet the state requirement to provide for someone else if I damage their property (car or other property) or injure their body with my vehicle." That means, on a very minimum level, that you want to purchase Bodily Injury Liability, Property Damage Liability and Uninsured Motorist coverage. That is all that most stated require for you to carry.
After that you are to decide if how much "liability" you want to carry. Most states require a minimum Bodily Injury Liability of $25,000 per person/ $50,000 per accident and Property Damage Liability of $10,000. Usually this will appear on your policy as 25/50/10. The Uninsured Motorist is there for your benefit. In the event a driver without any Bodily Injury insurance injures you, the Uninsured Motorist (UM) part of your policy will pay for your doctors bills and other related losses up to the limits of your own policy. The minimum Uninsured Motorist in most states is 25/50. Most insurance companies will offer a range of liability limits that go an high as $500.000/ $1,000,000. In other words, you are not limited to state minimums.
So, just how much liability should you carry? Refer back to my blog "How Much Auto Insurance Do I Need?"