Liability Coverage

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Claims by family members against family members differ from state to state. Most states require auto liability insurance to pay up to the full liability limits for the claim of a family member if another family member caused the accident. Other states require a payment, but only up to the state’s minimum financial-responsibility limit.

Finally, some states allow insurance companies to completely exclude coverage for claims between family members.

This coverage is required in all states. Be sure you purchase adequate limits to protect your assets in the event you are held legally liable for an accident that results in serious injury or death to others.

Auto liability coverage is usually sold with split limits. These are often expressed as a series of three numbers (for example: 100,000/200,000/50,000) which equates to $100,000 per person; $200,000 per occurrence and $50,000 property damage.

If you should be held legally liable for amounts greater than the liability coverage limits you choose, you are personally responsible.

Auto liability coverage is usually available with limits up to $1 million. If you think you might need higher limits of auto liability coverage, consider purchasing an umbrella liability policy.

There is no way to predict what an accident might cost you, but there are some general rules.

• Your potential cost would be higher if you seriously injure or kill an individual in an accident.
• Your potential cost also could be higher if you were guilty of negligent driving, driving under the influence, or live in an area known for its high jury awards.

To determine how much liability coverage you need, you should consider your assets, age, income and ability to pay higher premiums. Selecting liability coverage limits is perhaps the most difficult part of buying auto insurance. Most individuals prepare for the worst and hope for the best.