Let’s begin with talking about liability coverage. All automobile policies include liability coverage. This protects you financially if you’re in an accident and you’re responsible for an accident. This is required by most states.
For instance, in the state of Tennessee, it’s required that you carry a minimum of $25,000 personal injury per person with a cap of $50,000 per accident (if it’s more than a one-person injury accident), and then a property damage coverage of no less than $50,000. That’s intended to repair or replace any property that you might have damaged, including vehicles and personal property. It could even include fences, mailboxes and telephones poles as well.
Your liability limits are the maximum that your insurance carrier will pay for a claim. You’ll be financially responsible for the remainder of any injury or property loss. It’s not hard to imagine how you might exceed these minimal limits of [$25,000, $50,000, $15,000] if you’re involved in a serious accident. You may choose to increase liability limits above your state minimums in order to protect your assets, which could include the monies you have in your bank accounts, your home, your car, even your future wages and earnings, which many people do choose to increase the limits.
The typical liability policy that we see would be $100,000, $300,000, $500,000 property damage, which would typically cover you in most accidents and give you a little more peace of mind.
Now, another coverage that I mentioned was uninsured motorists, bodily injury. Basically, that covers you in the case where you were in an accident, and you’re struck by another driver (it’s their fault), and they’re not insured, meaning they have no insurance and no financial means to pay. This is minimum coverage for personally injury and property damage.
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