The Risks of Low Liability Coverage in Major Auto Accidents

Auto insurance is a critical component of financial planning for any vehicle owner. While it can provide financial protection in the event of an accident, the level of coverage you choose can significantly impact your financial stability.

Understanding Liability Coverage

Liability insurance can help cover the costs of damages and injuries you may cause to others in an accident where you are at fault up to the policy’s dollar limits. The amount of coverage you select can make a substantial difference in the event of a significant accident.

When you opt for lower liability coverage limits, such as the minimum levels required in California, you limit your financial protection. In the case of a minor accident, this might not pose a significant issue. However, after a major accident, the costs can quickly escalate, far exceeding the limits of your policy. This can leave you personally responsible for covering the remaining expenses, which can be financially devastating.

The Financial Consequences of Low Coverage

The financial consequences of low liability coverage in a major auto accident can be severe. Medical expenses alone can be exorbitant, especially if the accident results in serious injuries. Third-party accident-related medical costs such as hospital stays, surgeries, rehabilitation and ongoing medical care can quickly add up, surpassing the limits of a low-coverage policy.

Property damage is another critical factor to consider. In a substantial accident, the damage to other vehicles and property can be extensive. Additionally, if the accident involves multiple vehicles or causes damage to public property, the expenses can multiply.

Legal fees can also be a substantial burden in the aftermath of a major accident. If the other party involved sues you, the legal costs can be overwhelming. Defense attorney fees, court costs, and potential settlements or judgments can quickly deplete your financial resources. Higher liability coverage limits can help mitigate these expenses, providing a buffer against the economic impact of legal proceedings.

We’re Here to Help

Contact Choice Insurance Agency to learn more about the auto liability requirements near you and get a quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.