Understanding auto insurance is important for drivers of all ages. You may just sign up for whatever is recommended or try to find the “cheapest” route, but truly knowing why you need coverages and what the policy you select covers, is important for peace of mind.
The most basic part of any insurance policy is what is known a “liability” this covers damages caused to another car or person that is your fault.
The liability covers both bodily injury and property damage with insurance coverage broken down into three parts Per Person/Per Incident for bodily/Per incident for property.
Understanding this makes it easier to know what the numbers often written as 20/40/10 for example, mean when you’re shopping around for rates.
While the coverage amounts can vary from policy to policy and with a number of other factors at play, there a minimum amounts that must be kept according to laws set in place by the state where your car is insured.
When you are shopping around for an insurance policy that means you cannot buy anything that is less than your state’s minimum required by law. Higher liability limits can be purchased for additional protections however.
The issue with keeping the bare minimum as some argue, is that higher medical costs and rampant lawsuits can leave you unprotected when it comes to paying the much higher cost of the bills. When that happens, you may find your personal assets put at risk.
The amounts represent the max that will be paid toward any expenses for claims related to bodily and property damages.
At the start of this calendar year, the State of CT increased the minimum liability limits from $20,000 per person /$40,000 per occurrence for Bodily Injury, $10,000 Property Damage to $25,000 per Person/50,000 per occurrence for Bodily injury and $25,000 for property damage.