The liability insurance that you have purchased as part of your auto insurance policy comes with specific limits. Liability limits refer to the maximum amount your liability insurance company can pay you in a claim. You need to have knowledge of these liability limits before you ever buy a liability insurance policy. Talk to the experts before looking for a liability insurance company from which you will buy your liability insurance policy or auto insurance policy.
While minimum liability limits differ by state, generally speaking, you cannot purchase less than the minimum limits required by your state. However, you are free to purchase higher limits. In Illinois, the minimum liability limits are expressed as 25/50/20, which translates to $25,000 coverage for bodily injury for every individual you injured, $50,000 total coverage for sustained injuries per incident or accident, and $25,000 coverage for property damage. Just make sure to get your auto insurance policy from one of the reputable car insurance companies in Cicero.
What If I Exceed My Limits?
It is good practice to buy higher liability limits to safeguard yourself because if the expenses of the injured individual exceed your limits, you will be personally liable for the excess expenses. For instance, Illinois’s minimum liability limits are 25/50/25. Let’s say that you totaled a vehicle worth $32,000. You will need to pay for the $7,000 out of pocket since your property damage limit will cover only $25,000. In addition, let’s say that you seriously injured the driver and passengers of another vehicle, and they racked up a total of $180,000 in hospital expenses. You will then need to pay $130,000 out of pocket.
What If I Do Not Have the Money for Out-of-Pocket Expenses?
You might think that the injured party will not sue you because you do not have money or assets that they can go after. However, keep in mind that it is highly possible that you will get sued, found guilty in court, and still be forced to pay the injured party, plus penalties and legal fees on top of all that. Otherwise, your driver’s license will be suspended or revoked, your wages garnished, and your liens placed on your personal property or real estate.
How Much Liability Insurance Should I Have?
Most insurance specialists recommend 100/300/100 liability limits, but if you are looking for more protection, you can opt for 250/500/100. Put simply, having liability limits means that you will not risk losing your assets in the event that you get into a serious auto accident and have to pay thousands of dollars out of pocket.
The bottom line is that it is simply better to invest in higher limits, if you have the money for it, than to lose a lot more money later on. While the 25/50/20 minimum liability limits in Illinois will suffice for most accidents, you need to make sure that you have some money saved up in the event that you get in an auto accident that your minimum liability insurance coverage might not completely cover.