Insurance Information : How to Determine Car Insurance Liability Limits

My name is Seann McWhorter I'm the agency principal of Insure Right Insurance Agency located in Lehi, Utah We are here to talk about an insurance ins and outs and specifically how to determine that the car insurance liability limits

Well first of all what are car insurance liability limits These are generally referred to on your policy as your bodily injury and property damage liability limits And there are varying levels of coverage that are available to you In essence when you are out on the road, you are legally liable for any damage that you cause to other members of the public If you cause an accident and an individual gets hurt you are liable to pay for their medical bills, their pain and suffering and lost wages

How do you absorb those, well basically you know the risk is the same whether you have insurance or not insurance, whether you have state minimal liability limits or you carry much higher liability limits The risk is the same no matter what If you hit a brain surgeon and break his arm and he can't perform surgery anymore He's going to sue you and whether you have low limits or high limits it doesn't matter, what he's going to be able to get a judgment against you for So when determining the liability limits that you carry on your policy, you really have to ask yourself some questions

How much of that risk am I willing to obtain myself and how much of that risk would I prefer to transfer to an insurance company in exchange for premium dollars One thing that you have to consider is there is a price involved in the limits that you choose, and a cost, The price would be the premium that you are paying The cost however would be the price that you are paying plus all of the other things that come along with that For example if you hit a brain surgeon and you get a million dollar settlement against you, but you are only carrying state minimum liability limits here in Utah those are happen to be twenty five thousand per person, fifty thousand dollars per occurrence, in this situation your policy would only pay out twenty five thousand dollars and you would personally be legally liable for the nine hundred and seventy five thousand dollars difference in that judgment

So how much of that, what's the cost there, the cost would be whatever the premiums that you are paying plus that nine hundred and seventy five thousand dollars So you have to ask yourself am I really getting a good deal when somebody offers me a cheap auto insurance rate You have to look at the coverages that you are getting And so basically you want to determine how much of that risk you want to transfer You can retain all the risk yourself, or you can transfer the risk to the insurance company by paying a little bit higher premium