Liability Coverage

If you pay a premium for $25,000/50,000 in auto liability insurance coverage
, this is what could happen if you cause injury to another person in an auto accident and the injured person sues you. With significant injuries and damages, a jury might award the injured person $75,000 (a hypothetical figure). Under these facts, your insurance company would pay the injured plaintiff only $25,000 on your behalf, the amount of coverage you bought. As a result, you could be held liable for payment of the remaining $50,000 yourself! This is a harsh result, I am sure you would agree.

What would happen if you had purchased a large $100,000/$300,000 policy? Your insurance company would ordinarily pay the injured person the entire judgment amount of $75,000. Consequently, you would not be obligated to pay any part of the judgment yourself. To sum it up, the more insurance coverage you buy the less likely it is that you will ever be called upon to pay any part of a legal judgment against you.