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Posted February 13th, 2013
While each individual state has different laws; all but one require the owner of a licensed automobile to obtain a certain amount of insurance coverage, usually some form of liability insurance. This coverage is designed to protect your passengers and others in the case of an accident. This is a state mandated minimum amount and in most cases, the protection for you and others would be the lowest limit available and would be considered to be only a starting point for your insurance protection.
In fact, for most states the mandatory coverage actually provides no coverage for the physical damage of the owned vehicle (often loss payees will require that coverage). For example, if a vehicle is involved in an at-fault accident covered by a state mandated liability insurance there would be no coverage for the physical damage done to the car and limited coverage available to the other people’s property and bodily injury.
In some states that limit can be as low as 10/20/10. The first two numbers are referring to the bodily injury Liability limits and the third, or last one, refers to the property damage coverage. That means that the total coverage provided by the state mandatory policy, in an accident, would be a maximum of $10,000 per person up to a maximum of $20,000. If four people were injured the maximum benefit would still be $20,000 only. In this same accident, there would be $10,000 available to cover any damage to the other people’s vehicle. Now if you happen to hit a brand new Corvette and it is totaled out, that $10K isn’t even going to cover all the damage. You will be expected to make up the damage to the vehicle. Even if the other driver has insurance and they cover him, chances are very good his insurance company will be sending you the bill.
As I said before, each state has its own legal minimum limits for mandatory insurance protection but it is only the bare minimum set by political bodies. If you truly want protection for yourself and others you should contact a local independent insurance agent to discuss a good package of protection that is appropriate for your insurance needs. You should think in terms of potential life-time earnings when you consider policy limits. Court awards will follow you around for life. Because he has access to many insurance carriers who offer different levels of protection he can be sure you are receiving the best value for your insurance dollars.