Common Car Insurance Limits of Liability

Remember when you purchased your car? What was the first thing you had to do to be able to drive it?

That's right, register the vehicle with your state's motor vehicle department. In order to register you are required to have minimum car insurance limits of liability coverage to secure a tag that enables you to drive in that state.

What are the minimum car insurance limits of liability coverage? That depends on your state, as they are all different. If you would like to know what your state requires go to the insurance commissioner's office or you can go to About.com at the following link: (http://personalinsure.about.com/cs/vehicleratings/a/blautominimum.htm) and they will give you the minimum car insurance limits of liability coverage for your state. Since each state sets their own minimum car insurance limits of liability you should compare with your states insurance commissioner's office.

What does the minimum car insurance limits of liability cover? Bodily injury and property damage minimums are the financial liability portion of your state law. For example, my minimums in Georgia are 15/30/10. That means the insurer will pay a maximum of $15,000 for each bodily injury regardless of the number of insured claims made, or number of vehicles. The total they will pay per accident is $30,000. Also, the maximum they will pay for property damage is $10,000. All of these three limits are per incident.

So what happens if the bodily injuries or property damage are higher? Well the victim's insurance company will hire a lawyer to sue you and your insurer. The insurer is brought along to pay their part and whatever is left after the case is settled is your financial responsibility. What you choose as your limits of liability above the minimum is decided based upon your total assets or what assets you need to protect.

But what happens if you are in a different state? If that state has higher minimums than your state of residency, the insurer will match the higher limits. No one will be entitled to duplicate payments.