Recommended Auto Insurance Coverage

In order to protect the interests of victims of automobile accidents, most of the states have made the vehicle coverage mandatory. Therefore, owners and drivers of automobiles have to carry proof of a policy whenever they drive the vehicle. However, in order to maintain a standard, most of the states have prescribed the minimum limits that owners and drivers have to purchase in order to drive legally.

Prescribed minimum limits of liability:
The liability policy protects the bodily injury and property damage of the victim of an accident caused by the fault of the policyholder. The minimum limits of vehicle liability policies vary from state to state and are expressed in digit form, e.g. the minimum limits in Texas are 25/50/25, which translates into the following:

• $25,000 bodily injury for one person in a single accident
• $50,000 bodily injury total per accident
• $25,000 property damage per accident

Bodily Injury Liability(BI):
BI covers the bodily injury caused to the other person in an accident committed by the policyholder. The claims for BI are usually made for items such as medical bills, loss of income or pain and suffering.

Property Damage Liability (PD):
PD covers the damages caused to other’s property by the insured. In most of the cases, it is used for damages caused to the victim’s automobile but it can also cover a fence, a house or any other property damaged in an accident.

Additional coverage:
The prescribed liability limits is the minimum that each individual owner/driver has to carry and therefore one should always purchase policies based on one’s own needs, which may be more than the required limits.

Also, the liability coverage covers only the victim of the automobile accident and not the policyholder. The insured, i.e. the person who actually committed the accident can’t derive any compensation for their own injuries or damages they may sustain. Therefore, one should also consider to purchase additional add-ons, i.e. additional options over and above liability such as comprehensive and collision, medical expenses, and uninsured/underinsured motorist policies which offers protection to the owner/driver.

It is always a wise recommendation to purchase at least what the state law requires and the recommended auto insurance coverage mentioned above are for guidance only and should be bought according to one’s financial position, condition of the vehicle risk perception of the driver/owner. Therefore, every individual has a different situation and should get complete information about the different options available and make sure that you purchase the policy that meets your needs the best.