Why do I have to carry such high liability limits on my auto policy?
I am shopping insurance rates for my first car and my mom keeps telling me that I have to set my coverage limits at 100/300/50. But I can save a lot of money by opting for the state minimums. Why would I need such high limits?
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Answered on Jun 24, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
“Mom has the right idea!
The liability coverage limits that are recommended for most people are 100/300/50. Except for catastrophic losses, most accidents that occur are at or below this threshold.
If you carry a state minimum of 25/50/25 and have a loss that exceeds these limits, you will have to a pay out of pocket for damages, and possibly from any future earnings you may have. The cost of healthcare keeps rising so this option does put your assets in danger.
If you can’t afford the preferred limits right now, you will want to start your policy with the highest options you can afford and then increase your coverage at a later date.
You may also be able to find better insurance rates by comparing car insurance quotes online. The free app Jerry can help! Jerry shops with over 45+ carriers and to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal.”
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