Auto Insurance Tips

Liability insurance pays other people for damages caused by you.  The liability portion of your car insurance is the part that pays others for damages to their personal property, their real property and for their bodily injuries.

Liability insurance is probably mandatory in your state.  You are not mandated to have comprehensive or collision coverage because those parts of your policy pay you for damage to your car.  You can choose to take that risk if that is your desire.

However, liability insurance is probably mandatory because the state wants to make sure that others are reimbursed if you harm them while driving your car.

Liability insurance limits come in two varieties.  One is the combined single limit.  This can be abbreviated as “CSL.” The other variety is called split limits.

Your combined single limit might be $300,000.  This means that there your auto insurance policy will pay up to $300,000 for the combined cost of bodily injuries and property damage.

Split limits are usually expressed with slashes.  Liability split limits may be expressed this way:  $100,000/$50,000/$25,000.

In the above example the auto insurance company will pay a maximum of $100,000 for bodily injuries for any one accident.  They will pay a maximum of $50,000 for any individuals’ injuries.  They will pay a total of $25,000 for property damage.

It is important to know how your policy covers liability.  If you are successfully sued and the plaintiff wins more that your insurance policy will cover, you may be left holding the bag.  You may wind up being forced to sell your home or other assets.

For increased coverage, you may want to consider a personal excess liability policy.  These types of policies are also known as umbrella policies.  They are designed to supplement the liability portion of your auto insurance and home owners insurance policies.

Liability insurance is important to have and important to understand.  Liability insurance is important for your business as well as for yourself and your family.