Insure What? #2 Auto Liability

Auto Insurance Liability:

Liability: What the insurance company pays on your behalf if you are named at fault in an accident.

When you look at your insurance policy you may see something that looks like this:

Liability BI 25,000/50,000
Liability PD 25,000

If you already know what this means, just skip this post. For those of you who would like to know more...read on. The BI stands for Bodily Injury (that you cause to the people you hit) and the PD stands for Property Damage (that you cause to the people you hit). The first number in the BI category is payment per person, the second number in the BI category is per accident (more than one person injured).

If the policy above was your policy, if you had an at fault accident, your insurance company would pay up to $25,000 for bodily injury and $50,000 for bodily injury per accident. Property damage doesn't just cover the person's vehicle. It covers ALL property you damage, including fences, buildings, mailboxes, more than one vehicle etc. So you would be covered for up to $25,000 for property damage. Any bodily injury or property damage you cause beyond these limits is up to you to pay, which is the topic of my next subject.

DON'T EVER SETTLE FOR THE STATES LEGAL LIMITS. By law, Arkansas requires you, as a driver, to carry liability limits of BI25,000/BI50,000/PD25,000 (25/50/25) Now let me just say that if you have an at fault accident and you hit a new vehicle and total it, more than likely $25,000 will not pay for that vehicle. I mean most of you drive a vehicle that you paid more than $25,000 for right? You personally will be held responsible to pay anything over $25,000.

In this same accident, if you total a vehicle, more than likely there will be some type of injury. If you have ever gone to the hospital, you know how expensive things can get, and now days $25,000 may not cover the injury caused. Especially if there are some broken bones or some hospital stay involved. What if you hit a suburban with eight passengers and they are all injured? I don't think $50,000 would cover injury if it was a bad incident. So please, for me, at least carry 50/100/50 or higher. It's not much more expensive, I'm talking dollars here. This is just my opinion but if your required to carry it, why not pay a few dollars more and get coverage that can keep you out of debt??

The only reason you should ever carry state minimum limits is if you have enough money set aside to cover you, should you have a major accident. This is called self insuring. But remember, raising limits from 25/50/25 to 50/100/50 or even to 100/300/100 is only a few dollars more a month and may be worth it!
Again, this is my opinion and my opinion only :)