Liability Limits: What do they mean?

Limits: what does this mean? I have insurance, right?  Aren’t I covered? I’m so confused—just tell me how much it is and let me get out of here.

This conversation takes place often. However, understanding your liability limits is one of the most important things you need to understand about your insurance policy. Limits and endorsements are contractual, and if you have not given them proper thought with your agent, you need to call them as soon as possible (ASAP)!  Failing to seriously consider what you have to lose can cost you BIG time in the long run. That's why we spend so much time in our North Texas insurance office discussing these matters with our clients. Cash and savings, real estate, retirement savings, future earnings, and so many other things can be sued for in Texas if you are found legally liable in an incident.

Understanding your auto insurance policy limits

“BI” limits, or Bodily Injury limits, have to do with your “at fault action," be it texting, failing to stop, or whatever else it may be.  The state of Texas minimum for Bodily Inury is $30,000/$60,000. So what does that mean? If you’re at fault and only one other person is involved in the incident, $30,000 is the maximum that your policy will pay/defend on your behalf for Bodily Injury to another person.  $60,000 is the amount if there are multiple other people involved—no matter how many other people were hit and damaged by you.  It's important to remember that this Bodily Injury coverage does not cover those cars you just damaged. When deciding what auto insurance coverage you need, think about these two points (bodily injury to another person and damage that can occur to another vehicle)... And then think about anything else that could happen if you were at fault.

• What are your assets currently? What do you anticipate they will be in the future?
• Is your auto insurance coverage sufficient to protect your assets?
  Be honest with yourself here. You only have to watch the news for a little while to see fatality accidents and other auto related happenings. If you had one "uh-oh" moment, what do you have to lose?

Other available limits for Bodily Injury, above the Texas minimum, are $50,000/$100,000, $100,000/$300,000, $250,000/$500,000, and higher including Combined Single Limits (CSL).  Once you look at the pricing for these limits, you'll be surprised at how little the increase will be to raise your Bodily Injury limits. Yes, you’ll pay a little more, but trust me it’s small—especially when you consider the peace of mind and asset protection you are gaining! 

Bodily Injury is just aspect of your auto insurance policy (in fact, you might be surprised by some of the car insurance coverage you didn't know you have!)Some additional policy offerings you may want to consider evaluating when shopping for auto insurance are:

• Uninsured Motorist (UM/UIM)
• Personal Injury Protection (PIP)
• Comp
• Collision
• Rental Reimbursement
• Towing

These are just a small selection of available options. Given the number of auto policy options available to Texas drivers, it can be confusing to find the right coverage and policy for your family. Take a moment to call your dedicated Texas insurance agent to discover what your exposure may really be! Most of us will find ourselves in a situation where we wonder “Is my insurance good enough?”  Be proactive and call your independent agent today, so you can have peace of mind and confidence knowing that you have the right policy!