Why Higher Auto Policy Limits Can Save You Money

Most consumers believe that the higher the limits on a policy equals more money they will have to put out of pocket. This is not always the case.

Auto liability insurance is mandatory in most states and is designed to protect you financially in case you cause an accident and are held liable for the damages. When purchasing auto insurance, you will be required to select a liability limit, which is the maximum amount your insurance company will pay out in case of an accident. The standard liability limits offered by most insurance companies are typically quite low and may not be enough to fully protect you in the event of a serious accident.

Carrying higher auto liability limits can save you money in the long run because, in the event of a serious accident, the costs of damages and injuries can easily exceed the standard liability limits. If the damages and injuries exceed the limits of your policy, you will be held personally liable for the remaining costs. This can include medical expenses, lost wages, and even legal fees.

For example, if you're involved in an accident and are held liable for $100,000 in damages, but your liability limit is only $50,000, you will be responsible for paying the remaining $50,000 out of your own pocket. Carrying higher liability limits, such as $100,000/$300,000, can provide you with more coverage and help protect your assets in case of a serious accident.

It's also important to note that some insurance companies may offer discounts for carrying higher liability limits. Additionally, if you have assets that you want to protect, such as a home or investments, carrying higher liability limits can help protect them in case of a lawsuit.

In conclusion, carrying higher auto liability limits can save you money in the long run by providing you with more coverage and protection in case of an accident. While it may cost more upfront, the added protection can be well worth the investment in the long run. Be sure to consider your personal assets and financial situation when choosing your liability limits.