Car Insurance Liability: How Much Liability Do You Need?
Many people ask how much liability insurance do I need? Don’t start with the minimum as the minimum liability amount required in all states is very low even by global standards. In Ontario, Canada for instance the minimum liability limit is $200,000 and keep in my in Ontario health care is publicly paid for. This means in the United States, if you are involved in an automobile accident in which you are at-fault for someone else’s injuries you will likely have to make up the difference for their medical expenses if your liability insurance is too low. But how much liability insurance is enough?
When it comes to the amount of liability coverage to carry the experts are divided. Author of “Insurance for Dummies,” Jack Hungelmann guesses that raising liability auto insurance coverage from $300,000 to $500,000 would cost about $60 per year for two cars. Now consider that medical care for someone involved in an auto accident with serious injuries can easily run into the six figures, and he argues this a sound investment. He maintains that“Nobody should carry less than $500,000 per person,” and we agree.
In today’s age of frivolous lawsuits, the point of insurance is to protect you from financial risk. This means you buy insurance to avoid financial catastrophe, such as having to spend your life savings or worse declare bankruptcy just to pay for someone else’s medical treatment. With liability insurance it never hurts to have too much, but it could be very dangerous financially to have too little.
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