Auto Insurance

Liability coverage (also known as Bodily Injury liability coverage) is a very important coverage included in all auto insurance policies. Bodily Injury liability provides coverage in case you cause an accident in which another person (or people) is injured. Bodily Injury coverage covers the damages that you are legally responsible for in an at-fault accident and provides a legal defense in case another person (or group) sues you for damages.

Bodily Injury coverage is mandatory in most states and the majority of states have a minimum limit of required coverage. It is very important to understand the minimum limits required in your state.

Bodily Injury liability limits are typically shown as split limits (i.e. $50,000/$100,000, $100,000/$300,000) or Combined Single Limits (i.e. 300CSL, 500CSL, etc…). These abbreviations are meant to represent the highest amount per person (and per accident) of coverage that your insurance company would pay if you were found to be liable for damages to others. For example, if you have “split” limits (i.e. $100,000/$300,000) and you caused an accident that injured another person or group, your insurance would pay up to $100,000 for each person’s medical bills and up to $300,000 for the entire accident. Single limit coverage (300CSL) would cover up to $300,000 per person and a maximum of $300,000 per accident.

When choosing your Bodily Injury liability limits, you should consider all of your assets (including future earnings and assets). It is important to have adequate coverage because if you are in an accident and you do not have enough coverage to protect all of your assets, your assets could be at risk (especially if you are liable for damages that exceed your coverage limits). Drivers must be able to pay for losses they cause to others and will be forced to indemnify those losses if they are at fault. Bodily Injury liability coverage is the simplest way for most people to comply with these requirements.

Collision coverage pays for damages to your vehicle if you are in an automobile accident. Collision coverage pays for repairs up to the market value of your car, minus your deductible. The deductible is the amount of money you will be required to pay toward repairs before the benefits of the Collision coverage apply. In essence, your deductible is a way of sharing in the risk of insuring your car. The higher deductible you choose, the less the Collision coverage will cost (and vice versa).

Comprehensive insurance (“Other than Collision” Coverage) covers damage to your vehicle as well. Comprehensive insurance covers “Acts of God” claims like floods, wind, hail, falling branches, etc… as well as windshield damage, theft, deer hits, and vandalism to your vehicle. Similar to Collision coverage, Comprehensive coverage will pay for damages up to the fair market value of your vehicle (less your deductible). The higher deductible you choose, the less the Comprehensive coverage will cost (and vice versa).