Automobile Liability Insurance - 3 Things to know about Automobile Liability Insurance
Automobile liability insurance is the piece of your car insurance policy that pays for damaged property, medical bills, and other damages done to a person you have been in an accident with if it has been determined that you were at fault. The liability clause of your auto insurance policy accounts for up to half of the price of the premiums you pay, and is worth every penny.
The key thing to know about liability insurance is that you absolutely must have enough coverage to protect yourself in case you do cause an accident. Not having enough coverage can lead directly to financial ruin. If you do not have enough liability coverage you can, and probably will, be sued for any amount of money your car insurance company did not pay.
The second thing you need to understand about your auto liability insurance is how it is written. In most cases you will see a number that looks like this; 25/50/25. These are the limits on your coverage. All three numbers stand for thousands of dollars. The first $25,000 dollars is the maximum amount your insurance company will pay out to one person injured in an accident. This is for medical bills, lost wages, pain and suffering, and more. As you can imagine $25,000 dollars may not be enough liability insurance.
The second number, $50,000, is the maximum your policy will pay to all people injured in an accident. If you hit a van that has five passengers the most your insurance company will pay is $50,000 dollars. Again you can see why you would want to raise this coverage amount.
The last number, again $25,000 dollars, is the maximum amount your auto insurance company will pay out to repair damaged property. This can include their car or anything else they own that you damaged. If you are unfortunate to total someone's new car this will clearly not be enough coverage and it is likely you will be held responsible for the damages.
Each state has different laws mandating how much automobile liability insurance that you must car, but regardless of what they recommend you should seriously consider buying more than the recommended minimum.
Author: David Ackland
About the author:
Looking for cheap Austin auto insurance? Compare Austin auto insurance quotes online for free at http://www.AustinAutoInsuranceQuotes.com today.
Article source: Free Finance Articles.
More free articles under
Finance
Tax Deferral As An Investment Strategy
Deferring taxes on your income is an investment strategy in which income taxes are paid at a later date for money invested now. The benefit of tax deferral is that it provides more money for you to in...
Eliminating Erroneous Information From Your Credit Report
Credit repair services have counselors that are trained and experienced in credit repair and have the resources at hand that are not available to a typical consumer. If you try to repair your credit b...
What Is Public Employees' Retirement System?
The Public Employee Retirement System is for government employees except for teachers and students. This is a mandatory membership and all members should fill out a form of application at the beginning of their employment. It is a benefit plan that gives benefits to employees once they retire. This will be based on the number of years they rendered service and on their average salary.
Compare Motor Trade Insurance the Easy Way
For many companies insurance is a grudge purchase as unless you actually suffer a loss and have to make a claim then you really see no tangible benefit to it. And as insurance is one of the biggest ex...
You're Roth IRA Withdrawal
The Roth IRA was born on January 1, 1998 as a result of the Taxpayer Relief Act of 1997. It's named after former Senator William V. Roth, Jr. The Roth IRA provides no deduction for contributions, but instead provides a benefit that isn't available for any other form of retirement savings: if you meet certain requirements, all earnings are tax free when you or your beneficiary withdraws them. Other benefits include avoiding the early distribution penalty on certain Roth IRA wi...
Vehicle Financing Explained
Financing a vehicle is something that most people will have to do once, twice, or several times throughout the course of their lives
Wells Fargo 401K Plans Robbed -- Thousands $ Missing
According to a Minnesota TV station, a Wells Fargo 401(k) plan operations manager has been accused of robbing 401k plan accounts.