Could Your Auto Liability Limits Force You into Bankruptcy?
Most professionals worry about their professional liability, but the bigger exposure might be your personal liability. Liability just means “responsibility,” so liability insurance protects you when you are responsible or liable for injury or property damage to others. Auto liability insurance is designed to cover expenses when you cause an accident, but it can often come up short especially if you only hold state minimum limits.
So, what are state minimum limits and how do they work?
The minimum limits for Oklahoma are 25K / 50K / 25K. This means that these amounts are the maximum your insurance company will pay out and you could be responsible for any excess.
How much coverage is needed?
You should carry as much coverage you would need to protect your net worth and assets. Often, damage claims today are settled for thousands over what coverage exists. An example of this is the Ford F150. It is the most driven luxury vehicle on the road. In this definition of luxury, we are talking vehicles over a $50,000 value. In today’s world a bumper is not just a plastic bumper anymore, it now has cameras and sensors which will be even more costly to replace or repair.
If you only have state minimum limits and you cause damage to a Ford F150 and the vehicle is considered a total loss, you have a deficit of $25,000. Do you have enough savings to cover that? If you do not, you should consider raising your liability limits.
3iG does not sell limits less than 50K / 100K / 50K. However, we strongly recommend you should carry at least 100K / 300K / 100K or a combined single limit of at least 300K plus a personal umbrella policy.
If you are not sure what you have or you need your current coverage reviewed, contact us today at 405.521.1600.