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What is Liability Insurance?

Minimum Liability Coverage

September 2, 2020
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Written bySteve LekasCEO & Co-Founder
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Liability insurance is one of the most common terms referenced in insurance commercials, but least understood by consumers. It's understandable. The coverage details differ by state. It also matters whether you're referring to home or auto insurance.

Generally, liability insurance provides financial protection for the person found responsible for causing property damage or personal injury to someone else. Instead of the at-fault individual paying out-of-pocket for repairs or medical bills, they defer to their liability insurance to cover costs and provide a legal defense, up to a pre-determined amount.

Let's examine why maintaining only the minimum auto liability insurance coverage in Arizona, Illinois, Missouri, Ohio, and Texas may not be enough.

Disclaimer: Required liability insurance laws are subject to change. Always consult with a qualified insurance professional to discuss your coverage options. 

Arizona

In Arizona, minimum auto liability coverage amounts are: 

  • $25,000 for one person sustaining bodily injury or death in an accident,
  • $50,000 for two or more persons sustaining bodily injury or death in an accident, and
  • $15,000 for damage to others’ property

If you’re an Arizona driver and cause an accident, your car liability policy may cover the costs of bodily injuries or property and vehicle damage that others might incur. The policy would not cover your bodily injury or property/vehicle damages. You would need a separate policy, i.e.; Medical Payments coverage to help pay for your own injuries or collision coverage to help repair your vehicle. Without sufficient car liability insurance, you would be personally liable for injuries and damages sustained in an accident, which could be detrimental to your financial health. 

Illinois

In Illinois, minimum auto liability coverage amounts are:

  • Bodily Injury limits of at least $25,000 per person per accident and $50,000 total per accident.
  • Property Damage liability limits of at least $20,000 per accident.
  • Uninsured Motorist Bodily Injury Coverage minimum limits are $25,000 per person and $50,000 per accident. 
  • Underinsured Motorist Bodily Injury Insurance (UIM) – Pays the difference between your UIM limits and the liability limits of the at-fault driver, if lower than your UIM limits, you're required to carry this type of coverage if you purchase higher limits of uninsured motorist bodily injury coverage (UM).

Like most other states, car liability insurance coverage in Illinois pays for bodily injury to another person, damage you cause to someone else’s property or vehicle, and legal defense fees due to an accident that you cause. Because cars, whether new or used, are expensive and hospital bills can quickly rack up, consider purchasing higher coverage limits than required by law. If you are found at fault for an accident where claims exceed your coverage limits, you can be sued for the remaining amount.

Missouri

In Missouri, minimum auto liability coverage amounts are: 

  • Bodily Injury limits of at least $25,000 per person and $50,000 per accident.
  • Property Damage limits of at least $10,000 per accident.
  • Uninsured Motorist Bodily Injury Coverage minimum limits are $25,000 per person and $50,000 per accident. 

Drivers in Missouri must have liability insurance covering injuries and/or property damage to others caused by you. Although the minimum liability amounts mean paying a lower premium, those minimal limits may not provide enough coverage in certain situations. Imagine that you accidentally slide through a red light on a rainy day and hit another car, causing over $13,000 of damage. Although your state-required liability insurance will cover $10,000, you will still be responsible for paying the remaining $3,000. This doesn't account for the damages to your car or other expenses not covered by liability insurance. It could be worth it to budget for higher coverage. 

Ohio

In Ohio, minimum auto liability coverage amounts are: 

  • Bodily Injury limits of at least $25,000 per person, per accident and $50,000 for all persons in any one accident. .
  • Property Damage limits of at least $25,000 per accident.

For Ohio drivers, car liability insurance covers Bodily Injury Liability and Property Damage Liability in the case of an accident. Although the minimum required coverage may be enough in some cases, Ohio residents should consider purchasing more liability coverage if their budget allows. If you cause a more serious accident and the damage exceeds your policy limits, Ohio law allows victims to come after your assets to pay for damages. This includes your home and car. Fortunately, Ohio's average auto insurance premium is one of the lowest in the country. You might be able to afford more than the minimum coverage, even on a tight budget.

Texas

In Texas, minimum auto liability coverage amounts are:

  • Bodily Injury limits of at least $30,000 per person and up to $60,000 for all persons in any one accident. .
  • Property Damage limits of at least $25,000 per accident.

If you are at fault for a car accident in Texas, car liability insurance coverage can pay to repair the other driver's car, medical bills and other expenses. However, this policy has limits. It’s important to consider whether the minimum liability limits are enough to cover costs in certain situations. For example, if you total a car or cause a multi-car accident, your expenses will likely be much higher than the minimum limit. If you don’t have enough liability coverage to pay for the damages and injuries you cause, you will have to pay the rest out-of-pocket. 

Wondering if you have enough liability coverage to protect your assets? Speak with a trusted insurance professional to discuss your specific situation and determine if you would benefit from higher coverage limits. Give us a call at (833) 427-2624 and we will happily walk you through your current policy.

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