What is Automobile Liability Coverage and Why Do I Need It?

Car Accident Purchasing automobile insurance can be a daunting task. While the best way to determine the coverage that is right for you is discussing your situation with a trusted insurance advisor, a little research beforehand can help you to better understand your needs and options.

One of the most important aspects of automobile insurance, liability coverage pays for damages to other people if you are responsible for an accident. It protects your financial security by transferring the responsibility of paying for damages you cause during an automobile accident to the insurance company up to the requested limits. Often it is broken into two types; bodily injury liability and property damage liability.

In Florida, the minimum bodily injury liability requirements to comply with financial responsibility laws in the face of an accident are $10,000 in coverage per person, up to $20,000 total coverage for bodily injury liability. This means that if someone in another vehicle is injured in an accident you caused, there is $10,000 available to cover their medical expenses. If three people are injured in the other car or cars, no more than $20,000 will be paid for their medical costs all together. Unfortunately, $10,000 does not go very far when it comes to medical expenses and if someone is significantly injured in an accident you caused, he can pursue you directly for additional compensation for medical expenses, wages lost from missing work, and more.

In order to protect your financial stability, almost everyone needs to carry liability limits higher than the Florida state minimum. In fact, Florida has the lowest minimum liability requirements among the 50 states. If you lease an automobile, most leasing companies require that your insurance policy provide $100,000 per person up to $300,000 per accident for bodily injury liability and this limit is often considered a base line of coverage for anyone who owns a home as well.

Property damage liability is required for all vehicles registered in Florida. The minimum amount of coverage is $10,000 per accident. However, as with bodily injury liability, this $10,000 limit generally does not provide the coverage necessary to repair or replace any vehicle(s) damaged in an accident…Not many cars can be purchased for $10,000 these days. As with bodily injury liability, the owner of a damaged vehicle can pursue you directly for compensation if your automobile policy does not cover the cost of repairing or replacing his vehicle.

Keys in Ignition

In a recent accident, an insured was driving a new Cadillac. While legally crossing an intersection, another car ran the red light and plowed into their new vehicle. The damage done to the Cadillac cost approximately $12,000 to fix but the driver who ran the red light only had state minimum liability coverage which is $10,000 to fix damaged caused by his accident. The at-fault driver’s insurance company paid the $10,000 policy limit and washed it’s hands of the situation. Currently, the driver who ran the red light is being pursued by the Cadillac-owner’s insurance company to not only cover the remaining $2,000 needed to fix the vehicle, but also additional funds to compensate the Cadillac owner for the marked depreciation in value caused by the damage. The relatively minor additional premium, due to increase property damage liability coverage from $10,000 to $25,000 or $50,000 per accident, would have protected the at fault driver from this situation.

Only you can decide exactly how much liability coverage you need. It is important to ensure your assets are protected if you, or anyone in your household, are ever responsible for an accident. Consider how much money you have in savings, any investments you may hold, the value of your home, and even monthly earnings when deciding on the level of liability coverage necessary to protect yourself when someone is personally pursuing you for damages. In general, automobile policies top out at $500,000 in liability coverage, however, additional liability coverage is available through an umbrella or excess liability policy.

For additional questions or comments, please contact me at Dimmitt Insurance:

Elizabeth Staley, Private Client Account Manager


Main   727.797.9730

Direct 727.259.4908

25191 US Hwy 19 N

Clearwater, FL 33763


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