Your automobile liability insurance protects your assets when you are found to be responsible for property damage and bodily injury of others in an auto accident. In other words, if you cause an accident, you must pay for the resulting damage. Your auto liability coverage will pay up to the limit you purchased so you don’t have to pay out of pocket. But if the damage amount exceeds your coverage amount, you’re still responsible for paying the rest. So, you need to have an adequate limit of coverage to avoid paying for this loss yourself.
So how do you what amount of coverage is enough? Well, without knowing how much damage you will cause, we can never tell you what amount is enough. But you will want to be sure that your assets are protected. When choosing an appropriate limit of auto liability coverage, believe it or not your insurance agent may not be the best person to consult. The more assets that you have, the more coverage you will need to protect them. Your insurance agent may not be familiar enough with your financial situation to recommend an adequate level of insurance coverage. Most likely, your financial advisor is better-qualified than your insurance agent to advise you on this, so have a conversation with him or her to discuss liability coverage, then contact your insurance agent to obtain it.