How much auto liability coverage do I need?

Every auto insurance policy includes liability coverage; coverage available to you if you are involved in an accident that is your fault to pay for treatment of injuries or damage to the other driver’s automobile.  The obvious question is, how much liability coverage do I need?  The answer is, it depends.

You cannot operate a motor vehicle in Nevada without having minimal coverage of 15/30; $30,000.00 per accident and $15,000.00 per individual.  However, you can purchase liability coverage well in excess of the 15/30 minimum requirement.  In fact, the 15/30 limits established by Nevada are almost never enough. 

How do you know if you have enough?  Understanding the facts surrounding auto claims will help make this decision.

In 2012, there were about 5,419,000 crashes, 32,885 people were killed and 2,239,000 were injured.  For every 100 million vehicle miles people traveled, 75 people were injures.  There were 1,066 injuries for every 100,000 licensed drivers.  5% of bodily injury claims in 2010 were for more than $100,000.00.  The median jury award for liability was $19,806.00 and the average award was $181,197.00. 

The cost of additional insurance is fairly nominal.  For example, increasing your liability limits from $15,000.00 to $300,000.00 might only cost as little as $200.00 to $300.00 annually. 

The quick answer to how much liability insurance do you need is probably as much as you can afford.  Some additional factors to take into consideration might be the following:

1.     How much are you worth?  In other words, you might not need as much liability coverage when you are young and not worth a lot.  However, if you have a home and have savings, you may want coverage to cover their value. 

2.     How much auto insurance can you afford and how much you stand to lose in a lawsuit. 

A final consideration when trying to decide how much liability insurance do I need is underinsured motorist coverage.  Underinsured motorist coverage protects you should you be involved in an accident with a driver who has minimal coverage and/or not enough coverage to fairly compensate you for your damages.  At least 20% of the drivers on the road are driving with minimal limits.  Most carriers will only give you underinsured coverage that does not exceed your liability limits.  In other words, if you have liability limits of $50,000.00, the carrier will not give you more than $50,000.00 in underinsured motorist coverage.

Again, how much liability insurance do you need?  As much as you can afford. 



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