Liability coverage protects you if you (or another person driving your car with your permission) injure or kill someone or damage property. Show
Assume an accident for which you are clearly responsible: You run a red light, strike another car and injure the driver. Your liability coverage obliges the company to defend you — in court, if necessary — and pay claims to the other driver for vehicle damage and bodily injuries, including medical and hospital costs, rehabilitation, nursing care, and possibly lost income and money for pain and suffering. (The liability section of your policy does not compensate you for damage to your own car or any injuries to you. They are covered by other parts of the policy.) Now assume that you're involved in a collision at an intersection with no witnesses or evidence to pin the blame on either driver. Again, under your liability coverage, your insurer agrees to defend you against most proceedings the other driver may take against you. Subscribe to Kiplinger’s Personal FinanceBe a smarter, better informed investor. Save up to 74% Sign up for Kiplinger’s Free E-NewslettersProfit and prosper with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Profit and prosper with the best of Kiplinger’s expert advice - straight to your e-mail. datory in nearly all states (the others have financial-responsibility laws that can be met by purchasing this coverage). But state requirements are modest — typically $20,000 to $30,000 for bodily injury suffered by one person in an accident, $50,000 for all people hurt in the same accident, and up to $25,000 for property damage resulting from that accident. Most people need much more liability coverage than the state's required minimum. How much coverage do you have?Insurance companies use a shorthand to describe their liability coverage, and even if you understand the lingo, it might not be immediately apparent how much coverage you carry. For instance, a policy might be listed as 50/100/25. The first figure refers to the coverage (in thousands of dollars) for injury to one person, the second number is the limit for injuries to all people in the same accident, and the third figure is the coverage for property damage in the same accident. Some companies issue single-limit policies, with one liability limit that applies to total payments arising from the same accident, regardless of the number of people injured or the amount of property damaged. In Canada, single-limit policies are the rule. If the company incurs legal expenses to defend you against a lawsuit, those expenses don't count toward the liability limits. Nor do payments you receive under the policy for bail bonds and earnings lost while attending hearings and trials at the company's request. However, many policies free the company from any obligation to continue your legal defense for sums above the amount it has to pay. How much coverage you needYou should carry as much liability coverage as you can comfortably afford because damage claims today are sometimes settled for millions. State minimums don't come close to covering the cost of a serious accident. You should carry bodily-injury coverage of at least $100,000 per person, and $300,000 per accident, and property-damage coverage of $50,000, or a minimum of $300,000 on a single-limit policy. Raising your limits isn't expensive: $300,000 in coverage costs 20% more than $100,000, on average. The more coverage you buy, the less you have to pay per $1,000 of coverage. Ask your agent for precise figures. You may even want to investigate raising your liability coverage further through an umbrella policy. How much car insurance is enough?The minimum amount of car insurance you’ll typically need is state-required liability coverage. This allows you to pay for some, if not all, injuries and damages you’re liable for in an accident. The most commonly required liability limits are $25,000/$50,000/$25,000, which mean:
However, individual state requirements vary widely — your state may mandate higher or lower limits than these, while also requiring additional coverages, such as personal injury protection. If you’re leasing or financing your car, your lender may require you to carry liability coverage above your state’s minimum limits, in addition to comprehensive and collision coverage. Note that your state’s minimum car insurance requirements are just that — minimal coverage. It’s always a good idea to carry more liability coverage than what you’re legally required to so you’re not left paying the difference. Bodily injury: 57% of Progressive customers choose more coverage than their state requires. Property damage: 61% of Progressive customers choose more coverage than their state requires. Use our car insurance calculator to estimate how much liability coverage, and other types of coverage, is right for you. The car insurance coverages you may needLooking for a quick take on which coverages you may need? The table below breaks down the most common coverages, what they cover, and whether they may be required or not.
So, how much liability insurance do I really need for my car?If you have a home, savings, and other valuable assets, you’ll want enough liability coverage to protect them in case you’re liable in an accident. Start by calculating your net worth using the equation below: Value of home + value of cars + savings & investments — debt = net worth Since injuries can cost a lot more than property damage, you’ll want your total bodily injury limit (the second number) to be higher than your net worth. For example, if your net worth is $90,000, then a good car insurance policy for you might be structured as $50,000/$100,000/$50,000, giving you $100,000 in total bodily injury coverage per accident. Example: Chris causes an accident that results in $15,000 worth of medical bills for the injured driver. His policy covers up to $50,000 in bodily injury per person and up to $100,000 in bodily injury total per accident. Since his per person and per accident limits are well above the claim amount, his insurance could fully pay for the injured driver’s medical bills. How much property damage liability insurance do I need?Like bodily injury liability coverage, your property damage liability limit (the third number) should cover what you have to lose. For instance, if you have $25,000 in property damage coverage and your net worth is greater than that, you’re putting yourself at risk if you cause more than $25,000 worth of damage in an auto accident. Learn more about auto liability insurance. Do I need comprehensive & collision insurance?Comprehensive insuranceWhat does it cover? Comprehensive coverage protects your vehicle from things outside your control, such as theft, vandalism, fire, collisions with animals, glass breakage, and damage from weather. Is it required? No states require comprehensive coverage. However, if you lease or finance your vehicle, your lender will typically require you to carry it. Should I have comprehensive insurance? Even if you own your car outright, comprehensive coverage might be worth having if your car is worth more than a few thousand dollars or if you can't afford to make repairs or buy a new one if it's damaged. At Progressive, the average monthly cost of comprehensive coverage is just over $11 for a six-month policy. Important note: If you decide to add comprehensive coverage, make sure you choose a deductible that you could afford if you were to file a claim. A high deductible may save you more on car insurance per policy period, but you could end up with high out-of-pocket expenses if you file a claim. Learn more about comprehensive coverage and choosing the right deductible. Example: Caitlyn, Chris’ wife, is driving late at night when a deer suddenly jumps in front of her car, causing $5,000 in damage. Unfortunately, they don’t have comprehensive coverage and are on the hook for the full $5,000 to repair Caitlyn’s car, which, despite being five years old, is still worth around $11,000. If they had comprehensive with even a deductible of $1,000, they would have still saved close to $4,000 in repair bills after factoring in the cost of coverage. Collision insuranceWhat does it cover? Collision pays to repair or replace your car if it’s damaged in an accident with another vehicle or object (such as a street sign or guardrail). With Progressive, your collision coverage can also pay up to $1,000 for your pet’s medical bills if they’re injured in a covered accident. Is it required? No states require collision coverage, but many lenders will require you to add collision insurance if you lease or finance your vehicle. Should I have collision insurance? As with comprehensive coverage, collision is typically worth having if you can’t afford to pay out of pocket for damages to your car or your vehicle is worth more than a few thousand dollars. With Progressive, collision coverage costs around $32 per month on average for a six-month policy. Important note: If you add collision coverage to your policy, make sure you choose a deductible you can afford to pay. Learn more about collision insurance and how to choose the right deductible. Example: Chris leaves his car parked on the street overnight. In the morning, he discovers that someone hit his rear bumper, causing $1,000 in damage. Chris doesn’t have collision coverage on his car, as it’s only worth around $2,000. He decided it wasn’t worth having on his car since any claim payout would be minimal, even with a low deductible. Plus, he knew he could afford to pay for repairs or a new car. How much medical payments coverage do I need?What does it cover? Medical payments coverage, or MedPay, typically covers medical expenses you or your passengers receive after a car accident, even if you’re riding in someone else’s car. Is it required? MedPay is required in just two states: Maine and New Hampshire (if you choose to buy car insurance). How much MedPay coverage should I have? Coverage limits typically start at $1,000 per person and max out at $10,000 per person. If you have health insurance, it might be worth getting enough coverage to pay for your health plan’s deductible. If you and your passengers don’t have
health insurance, you should consider a higher limit or maxing out your coverage. Important note: Personal injury protection (PIP) also provides coverage for medical expenses, in addition to lost wages and funeral expenses. If you have a choice between PIP and MedPay, PIP is almost always a better choice due to its expanded coverages. Example: Caitlyn and Chris are in an accident while riding as passengers in their friend Ted’s car. Everyone is OK, but Chris and Caitlyn get checked out at the hospital just to be on the safe side. Chris gets a $750 X-ray, while Caitlyn gets a $1,000 CT scan. Fortunately, they have MedPay coverage up to $2,000 per person, so their auto insurance pays for both of their bills. How much personal injury protection do I need?What does it cover? Personal injury protection, or PIP, is like MedPay in that it covers you or your passengers’ medical bills. However, depending on your state, it can also cover lost wages, funeral expenses, and even housecleaning or child care services if your injuries prevent you from doing regular activities. Is it required? Some states require PIP, but it isn’t required or offered in most. How much PIP coverage should I have? PIP coverage limits vary between states, with some maxing out below $10,000 per person or as high as $25,000 per person. If you already have health insurance or other insurance policies that cover the same expenses as PIP, your state’s minimum coverage levels may suffice. However, you should consider adding more PIP coverage if:
Example: It’s Chris’ turn to lead the office carpool. After picking up three of his colleagues, he ends up in a fender bender that leaves two of his co-workers with $500 in medical bills each. They file a claim with Chris’ insurance which provides $2,000 in PIP coverage per person — enough to cover both of their medical bills. Learn more about personal injury protection, including choosing the right coverages and amounts. How much uninsured/underinsured motorist coverage do I need?What does it cover? Uninsured motorist coverage (UM) protects you if you’re hit by a driver who doesn’t have insurance. Underinsured motorist coverage (UIM) provides coverage if the at-fault driver’s liability limits are too low to cover all your medical bills or damages. UM and UIM coverage is often written out the same way as liability coverage. For example: $15,000 bodily injury per person / $30,000 total bodily injury per accident / $15,000 for property damage per accident. Some states may list UM/UIM motorist property damage separately from UM/UIM bodily injury limits. Also, you can sometimes drop UM/UIM property damage coverage if you have collision, since these two coverages overlap. Is it required? Some states require UM/UIM coverage, but most do not. You may also need to carry UM/UIM coverage if you lease or finance your vehicle, depending on your lender. How much UM/UIM coverage should I have? There are several states that require your UM/UIM coverage limits to match your liability insurance limits. But even if your state doesn’t require it, having the same limits for your UM/UIM and liability coverage is a good idea so you have an equal amount of protection both when you’re at fault or when you’re hit by someone else. Thinking about increasing your limits? You’re in good company — many Progressive customers choose higher UM limits than the required minimum. Important note: If you live in a state with a high percentage of uninsured drivers, but UM coverage isn’t required, you should strongly consider buying coverage. New Mexico, for example, had an estimated uninsured driver rate of 20.8% in 2015, according to the Insurance Research Council. Learn more about UM/UIM coverage. Example: Caitlyn and Chris are rear-ended by another driver who doesn’t have insurance. The damage to their car totals $3,500. But since they have uninsured motorist coverage for up to $5,000 in property damage, their insurance pays for the repairs. What additional coverages should I consider?Rideshare insuranceRideshare insurance is a smart choice (often a required choice) if you drive under a ridesharing platform like Uber or Lyft. Rideshare coverage fills the gaps between your personal insurance and any insurance provided by the ridesharing company so you’re always protected, whether you’re waiting for a ride request or dropping someone off. Learn more about how rideshare insurance works. Gap insurance, also known as loan/lease payoffIf you’re leasing or financing your vehicle, gap insurance may be right for you. This optional coverage pays the difference between what you owe on your vehicle and how much it’s worth. So, if your car gets totaled, you’ll receive the actual cash value of your vehicle, plus the additional amount you owe on it so you can pay off your loan or lease. Bear in mind, you’ll need comprehensive and collision coverage to add gap coverage. Learn more about gap insurance. Pro tip: When choosing auto insurance coverages, always keep in mind how much you could afford to pay for injuries, damages, repairs, or even a new car. The right policy is rarely the cheapest one possible, but rather the cheapest one that gives you all the coverage you need to get peace of mind. How to get the right car insurance coveragesNew Progressive customersCall 1-866-749-7436 or quote car insurance online and we can help you sort through your coverage options to find the right auto policy for you. Current Progressive customersLog in to your policy or call 1-866-749-7436 to select the coverages you want to add to your auto insurance. Please note: The above is meant as general information to help you understand the different aspects of insurance. Read our editorial standards for Answers content. This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provisions, limitations, or exclusions expressly stated in any insurance policy. Descriptions of all coverages and other features are necessarily brief; in order to fully understand the coverages and other features of a specific insurance policy, we encourage you to read the applicable policy and/or speak to an insurance representative. Coverages and other features vary between insurers, vary by state, and are not available in all states. Whether an accident or other loss is covered is subject to the terms and conditions of the actual insurance policy or policies involved in the claim. References to average or typical premiums, amounts of losses, deductibles, costs of coverages/repair, etc., are illustrative and may not apply to your situation. We are not responsible for the content of any third-party sites linked from this page. What is the maximum amount of insurance coverage you need?The amount of Liability coverage you carry should be high enough to protect your assets in the event of an accident. Most experts recommend a limit of at least $100,000/$300,000, but that may not be enough.
What is recommended bodily injury coverage in Florida?Recommended Coverage Limits: We suggest that you buy Bodily Injury Liability coverage in the amount of $100,000 per person/$300,000 per incident (accident), at a bare minimum. However, we suggest that you buy higher limits if you have substantial assets that you want to protect.
What is the lowest bodily injury coverage?Here are the minimum liability insurance requirements (per California Insurance Code §11580.1b): $15,000 for injury/death to one person. $30,000 for injury/death to more than one person. $5,000 for damage to property.
What happens if I don't have bodily injury coverage in Florida?If you don't have bodily injury coverage in Florida, you are at risk of being held personally responsible for other people's medical expenses if you cause a car accident, but you will not be breaking the law. Florida does not require bodily injury liability insurance.
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How much bodily injury insurance should i have
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