A man should look for what is, and not for what he thinks should be. - Albert Einstein
An auto insurance policy can be so complicated that most people do not even know what is completely available to them. Many people just buy or renew their policies every year without knowing what they are all about. If you would like to learn about your vehicle insurance policy and decide how much liability you need, it is a good idea to learn about a few terms.
Your state determines part of the equation for determining your liability coverage. Besides New Hampshire and Wisconsin, each state has minimum coverage requirements that vary according to the type of liability. The three types of liability coverage included in an auto insurance policy are property damage, bodily injury for a person, and bodily injury for all parties involved in an accident. There are two categories of bodily injury liability coverage: injury to one person and injuries to all other parties. You and the people on your policy are not covered, nor is any property damage. If you are the cause of an accident, you could responsible for someone else's medical costs, pain and suffering, or loss of income. You might be sued-this places your personal assets at risk. Bodily injury liability also covers legal defense should you need legal representation.
Property damage liability is the part of an auto insurance policy. It covers the damage you may cause to someone's property-a building, car, or fence. It also covers legal fees if you are sued. A minimum of $50,000 for a vehicles is a good figure, since you do not know what kind of vehicle you may damage in an accident.
The main thing you should consider while assessing your auto insurance liability coverage needs is how much you have to protect. If you do not have many assets you could lose in a lawsuit, the minimum requirements might be a good option for you. However, if your net worth is high, make sure that you are adequately covered to protect your assets.