What Auto Insurance Liability Limit Should I Carry?

Liability coverage is an important part of your auto insurance policy as it helps cover bodily injury and property damage should you be found responsible for an accident. Having the right amount of liability coverage helps to protect your personal finances in the event you are responsible for an accident.

Dave Ramsey typically recommends a minimum of $100,000 of protection for each person on your policy. You may be thinking, “That seems high, why don’t I just get the minimum amount required and save a few dollars upfront?” Most states require you to have liability coverage, but the amount required is typically much less than what’s recommended and costs around the same amount. Opting for more coverage at a slightly higher cost will save you money in the long run should you ever be found responsible for an accident. Imagine that you’re found responsible for an accident where two people are injured, and their medical costs end up being around $50,000 each. In this case, you’d be covered.

Dave also recommends choosing a higher deductible on your comprehensive and collision coverage for an added layer of protection. If your personal finances allow, consider carrying an amount of liability coverage equal to or greater than the value of your home.