As much as we don’t want to admit it, there are things in life where we reach for the bare minimum. In the world of insurance, this is usually liability auto coverage. Nobody wants to admit that they only put liability insurance on their cars. Some people are proud of it — a 15 year old car with full coverage doesn’t sound very financial sound, so they’re trying to tell the world about how much money they’re saving. This is something noble at first but the truth is that you’re better off at least knowing a little more about the insurance world than if you just assume that you have everything together.

So, where do you actually begin? You have to start with the basics here — liability insurance is the absolute minimum coverage needed to protect the other car that you hit in a collision accident. Yes, that’s right — that money that you’re paying the insurance company is designed to protect the other car, not you. That’s the minimum coverage that you can have without losing your ability to drive on the open road. A lot of people decide to get more than just the liability coverage, but they have special seasons why they have to do this. For example, if you have a new vehicle, then you’re going to need to get insurance that covers total loss in the event of an accident. That’s going to be a lot more expensive because you’ve essentially doubled the amount of risk that the insurance company has to take on. Not only are they going to have to protect your vehicle in the case of an accident, but they are still going to have the burden of taking care of someone else’s car as well.

One of the reasons why you don’t want to take on liability insurance alone is because the world is always unsure and uncertain. In other words, you have to realize that there’s going to come a point where you will want to get more coverage because of the rise of higher priced vehicles. If you have liability insurance coverage with the state minimums, and you hit a Corvette, you are still not going to have enough insurance to cover the damages to their vehicle. The possibility is there, but it’s not as much of a sure thing as you think.

That’s because liability coverage is actually broken down into a few different pieces. The first is bodily injury liability. This is when you are liable for death or injury caused by the car you were driving. Legal fees, bail bonds, and court costs are usually covered. This is basically insurance against losing everything because you weren’t covered by insurance and you got taken to the cleaners by the family in the other vehicle that you hit. You generally want to have more than just the minimum here because the costs can run pretty high.

The next component is property damage liability. This is when you are still legally liable for damages, but this time it covers the property damage, not the bodily injury part. This is another area where you can be underinsured — especially if you hit a newer vehicle where they were carrying expensive things. Trust us, it can get pretty expensive.

The third component is basic personal injury protection. Liability insurance doesn’t completely forget that you’re a driver, but it doesn’t cover the damage on your vehicle. You need to make sure you max Personal Injury Protection out as much as you can. That’s the one part of your insurance policy that’s designed to actually protect you. It can cover reasonable medical and dental expenses, replace lost income for a set point of time. In the event of death, it can pay for funeral expenses, and there are also survivor’s benefits as well.

The final component of liability coverage is uninsured/underinsured motorist coverage. Not every insurance company will force you to carry this. Some companies this that it’s really a good idea and make it mandatory, but others tell you that it’s better to have it than to not have it. This is because it’s still possible to have hit and run motorists, motorists that don’t carry enough insurance, and motorists that simply cancel their insurance coverage after they finish getting their cars inspected. Broken insurance coverage is a serious penalty, but that doesn’t meant hat people aren’t willing to chance it in hopes that they’ll be able to save money. You just need to keep things in perspective.

Uninsured & underinsured motorist coverage pays you any monetary damages that you’re entitled to get as a result of injury or death caused by an uninsured or underinsured motorist. As mentioned earlier, it also covers hit-and-run motorists. You just need to make sure that you understand the limits.

Again, if you have any questions about your insurance policy, you really need to make sure that you’re asking the right people. We can only give you the general information about insurance and advise you to talk to your insurance company when you really want to get more information. Good luck out there, and make sure that you keep your insurance coverage in good standing. After all, you never know when you will need to use it!