Liability caps for property damage: The most money your insurance company will pay to fix the vehicles and houses of other people you harm.
Limits of liability can be shortened to two numbers separated by slashes. For instance, “50/100/50” refers to bodily injury liability insurance limits of $50,000 per injured person, $100,000 per accident, and $50,000 for property damage. Both single-limit and split-limit policies are common types of liability insurance.
What is the typical annual premium for liability coverage on a vehicle?
The average cost of liability insurance is $1,407 annually, though this number can vary widely depending on the policy limits and the state in which you reside. Increasing your liability limits will result in a higher premium, but this increase will be minimal in comparison to the safety net provided by substantially more coverage than is required by law. So, it is recommended that you get as much liability insurance as you can reasonably afford.
When to Carry Only the Minimum Liability Coverage
While most states mandate that motorists have liability insurance, the bare minimum policy may not cover all of an accident victim’s expenses. Particularly if you are financially secure, you should always obtain as much liability insurance as you can afford.
Nonetheless, property damage liability claims are often less expensive than bodily injury liability claims, so you can get away with a smaller property damage liability limit if you want to save money.
It’s possible that you’d feel fine with the barest minimum of insurance protection if you either didn’t have many valuables, to begin with, or considered the potential downsides to be acceptable. But you should always have enough insurance to prevent breaking the law and paying fines for driving without coverage.
Insurance Coverage Restrictions for Motor Vehicles
The liability limit on your auto policy is the maximum amount your insurer will pay for other people’s medical bills and repairs to their vehicles if you cause an accident. The maximum amount of liability is often expressed as three integers separated by slashes. For instance, the minimum liability coverage in Arizona is 50/30/10.
That means drivers need to have a minimum of $10,000 in property damage liability insurance and a minimum of $50,000 in bodily injury liability insurance per accident. This is why you need to carry more liability insurance than what the state mandates.