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Feb 26

“What’s the Right Auto Liability Limit for Me?”

Low Limit Policies

In the current difficult economic climate it is tempting to purchase lower limits to save premium dollars or to buy a policy from an insurance company that advertises low-cost coverage. Often, these “low-cost” policies provide only the minimum amounts of liability required by state law.

Buying minimum limits can be a mistake and will not provide the protection you need. If you’re found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. These costs could wipe you out!

Minimum Limits in New York

New York State law requires all auto insurance policies to provide liability coverage for:

  • One accident of at least $25,000 for injuries to one person
  • $50,000 for injuries to multiple people,
  • $10,000 for damage to other people’s property.

(This is sometimes referred to as 25/50/10).

A limit of $25,000 per person can be spent pretty quickly if an injured person needs emergency surgery, an extended hospital stay or lengthy physical therapy.

A limit of $10,000 for damage to another person’s property won’t be enough to replace most cars on the road today.

What is Auto Liability Insurance?

Auto liability insurance pays for amounts the insured person owes as damages for bodily injuries and property damage caused to someone else due to an auto accident. It also pays for the cost of hiring an attorney to provide legal defense. Most states, New York included, require all auto insurance policies to provide at least a minimal amount of liability coverage.

Auto liability limits are typically available up to $500,000 for a relatively small increase in premium.

Other Types of Insurance

There are other types of auto liability coverage that can protect your property and assets.

  • Uninsured Motorist Coverage protects you against other drivers who do not have auto liability insurance and from hit-and-run drivers.
  • Underinsured Motorist Coverage protects you against other drivers who have low limit insurance policies. It will also protect you if you are hit as a pedestrian.
  • Umbrella Liability Policy provides coverage over other policies.
  • Collision Coverage pays for damage to your car resulting from a collision with another car or object. If you are not at fault for an accident your insurance company may try to recover the amount they paid you from the other driver’s insurance company, including your deductible.

Consult With Your Independent Agent for the Best Protection

  • Your independent insurance agent will help you understand the best liability limit to protect your income and assets.
  • Independent insurance agents work with multiple insurance companies and therefore can offer you a range of coverage and price options.
  • Ask your independent insurance agent today about these important coverage options.
  • Protect your assets and drive responsibly with adequate auto liability limits.

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