Car insurance is complicated. Attorneys don’t always understand policies that are filled with fine print. How can consumers be expected to understand what kind of insurance they are buying. This article is intended to offer some basic understanding of a car insurance policy.
Liability insurance provides money to cover damages you cause to other people or their property due to your negligence. The laws of most states require that every driver have this coverage. The problems come when the policy has minimum limits. In Arkansas that is $25,000 per person and $50,000 per accident. In many, if not most accidents, this is not enough to cover all injuries with today’s rising cost of medical care.
Consumers can purchase higher limits for a minimum amount. Some insurance companies or agents do not disclose this because the additional coverage means the insurance company will possibly have to pay more money out if you are the cause of a serious injury. If you only have minimum limits, the company is protected. It only has to pay the minimum limits, and you may be on the hook for the rest.
We recommend to all our clients that the safe thing to do is to have higher limits even if it costs a little more. What are higher limits? $100,000300,000 is a good place to start. It doesn’t cost that much more, and will cover all but the most serious of accidents.