Are My Liability Limits Adequate on My Auto Insurance?

Written by Jared Thames—Sales Representative

July 24, 2018 · Car Insurance, Personal Lines

Blog Are My Liability Limits Adequate on My Auto Insurance?

This is a perplexing question and not easily answered. It is so hard to pin down because a Judge may be the ultimate decider and we are dealing with the unknown. You never prepare for an accident when you pull out of the driveway but they are just a normal part of our society. They happen so quickly and you never know the severity. The State of Mississippi requires drivers to have at least bodily injury liability limits of $25,000 per person with a $50,000 limit on all bodily injury and $25,000 total limit for property damage.

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Please note: coverage cannot be bound or altered online. A service representative will need to contact you to finalize your request.

What do liability limits really mean?

It means if you are in a car accident and it is your fault, the most your policy will pay is $25,000 to any one person who is hurt. It also means that $50,000 is the most it will pay for all people injured. The $25,000 in property damage pays for damage caused to others property.

For example:

It’s Saturday morning, life is great and you carry state minimum limits. You are heading to lunch with your friends. You are running a little late so you decide to roll the dice and run the yellow light. You miscalculated and now the lanes are filling with cars. SMASH! You T-bone a small family. Mother, injuries totaling $48,000. Father, injuries totaling $20,000. Luckily, the children are OK.

How does your policy pay?

The father’s injuries are paid in total, $20,000. However, the mother is only paid $25,000 because that is the maximum limit payable to one person. Where does the other $23,000 come from for her injuries? YOU! In addition, they were driving a brand new $60,000 SUV. Your policy is only paying the limit of $25,000 for their damaged property. Where does the other $35,000 come from? Yep, YOU again… In this scenario, your insurance company would have paid $70,000 but you would still be responsible for the remaining $58,000, good thing those kids are ok, right? Unless you have $58,000 laying around, life wouldn’t be so great anymore.

Ok, I think you get the picture. Liability coverage is usually the least expensive part of the policy. Most companies offer limits up to $500,000 but some companies even offer limits over $1,000,000. I would recommend having no less than 4 times the state minimum limit—in our state that would be $100,000 per person, $300,000 total bodily injury, and $100,000 for property damage.

Call us today and let’s discuss your limits 601-636-5560.

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