When buying auto insurance, make sure you have adequate bodily injury and property damage liability coverage. These financially protect you up to the limit of insurance you choose, so select a level of coverage that reflects costs and risks in your area.
Your bodily injury limit will pay up to your selected coverage amount if you are found liable for an accident where injury, medical and/or loss of income payments are owed to the injured party. Property damage pays for the damage to property which you are legally liable for, such as vehicles and buildings that must be repaired or replaced.
Your insurance company will defend you if you are sued and will pay expenses up to your limits, but after your limit has been exhausted, in many cases, you can still be liable for bills in excess of the coverage amount. Liens can be placed on your home, wages can be garnished, and other forms of settlement can be mandated by courts so the injured party is appropriately compensated. While most states have mandatory minimums, it is wise to look at those seriously and consider the potential costs of even one bad accident as you select your levels of coverage.
