When To Increase Your Auto Liability Coverage Limit
If you have your state's minimum liability coverage, there may come a time when the coverage is grossly inadequate for you. Auto liability coverage shields you from claims other people might have against you, so an increase of this risk calls for a corresponding increase in coverage. Below are some of the circumstances in which you should increase your liability coverage.
Increase in Accidents
The more you are likely to be involved in an accident, the higher your liability limit should be. Thus, you should increase your liability limit if your accident risk has increased. This may be the case, for example, if you have moved to a neighborhood with more accidents than your former neighborhood. Another example is if you have changed your commute and you now take a more dangerous route to work than before.
Teenage Driver
You should also increase your liability coverage when your teenage driver receives their driving license. Teenage drivers have limited driving experience and tend to be reckless, which mean they cause more accidents than adults. According to the Centers for Disease Control and Prevention (CDC), teenagers also make dangerous driving errors, tailgate a lot, and also face more DUI dangers than adults.
Asset Accumulation
When you cause an accident with more damages than your insurance coverage can pay, the victims of the accident can come after your personal assets to recover their damages. Your cars, real estate properties, business, and even cash in the bank can all become targets for accident victims. This might not worry you if you don't have such assets. However, once you accumulate such assets, you need to protect them by increasing your liability coverage.
Multiple Drivers
The more people drive your car, the more likely your car is to be involved in an accident. This means your risk of an auto accident is high if you regularly loan your car to others or if you have multiple drivers listed on your policy. In such a case, you should protect yourself by increasing your liability coverage limit.
Carpooling
Lastly, you should also boost your liability coverage if you regularly carpool with others. Carpooling involves multiple passengers, and if you are involved in an accident with multiple passengers, they will all claim damages from you (technically your insurance policy) in case of an accident. That means an auto accident with multiple passengers can easily exceed your auto liability limit.
A moderate increase in your auto liability coverage won't cost you much, but it can save you a lot of money. Evaluate your liability limit today to determine whether it is adequate. For more information, contact a Hayes McDowell insurance agent or other agent in your area.