When it comes to auto insurance, it is not uncommon for people to not fully understand their liability limits. Often times, people request the bare minimum liability coverage the state requires in order to be “street legal”. This phrase is in reference to the state minimum limit of liability, i.e. the absolute lowest limits that can be carried by a driver in his/her particular state. This limit varies from state to state, but in Texas, it is 30/60/25.
Although these numbers may seem random, they each stand for a dollar amount of coverage that the auto insurance company will extend for each respective area. The first number, 30, stands for bodily injury for one person. This means that the insurance company will cover up to $30,000 for one person’s medical bills. The second number, 60, stands for bodily injury for the total number of people in the car; this means that the insurance company will cover up to $60,000 total in medical bills for the passengers in the car as a group. The third number, 25, stands for property damage coverage; this means that the insurance company will afford up to $25,000 for the damage that you might to do somebody’s car.
In summation, if you had state minimum coverage and caused a two-car accident with three injuries spread throughout the vehicles, the max in total your insurance would cover is $60k for all three people’s injuries. If you have ever been to the hospital, you don’t need us to tell you this doesn’t get very far. Unfortunately, in this scenario one of the cars you hit was a brand-new BMW that is going to cost $65,000 to replace. Your $25,000 worth of property damage, unfortunately, leaves you short. An alternative to the above option of split limit coverage is combined single limit coverage or CSL. For CSL, as opposed to having a determined amount of coverage for either bodily injury or property damage, the insurance company will give a set amount of total coverage, which can be used however needed in the event of an accident. An example of this would be 500 CSL, which would mean that the total amount of liability coverage offered is $500,000 to be split for injuries and property damage. The benefit to CSL would be that you could have a greater amount of coverage for either bodily injury or property damage, if needed.
With auto insurance, there can be a large amount of variance between the levels of coverage purchased. As an agency, Alpha Omega counsels clients to carry higher liability limits than state minimum in order to best protect their families and assets. Because not all auto insurance policies are created equal, you will want to confirm what you currently carry before deciding to switch to another company. If you don’t know your current auto insurance coverage limits, give us a call today – we would love to review your auto policy with you in order to best determine any gaps or weaknesses in coverage.