What Liability Limits Should Drivers Consider?

Your liability limits should be high enough to protect your personal assets — savings, home equity, investments, and future income — in case you cause a serious accident. State minimums satisfy the law, but they rarely cover the real cost of a major crash.

How liability limits are structured

Auto liability limits are typically shown as three numbers, like 100/300/100. The first number is the maximum per-person payout for bodily injury ($100,000). The second is the maximum total payout for all bodily injuries in one accident ($300,000). The third is the maximum for property damage ($100,000). These numbers represent the most your insurer will pay. Anything above those limits comes out of your pocket.

Why state minimums fall short

Florida's minimum property damage liability is just $10,000. A single trip to the emergency room can cost $20,000 to $50,000. Totaling someone's newer vehicle easily exceeds $30,000. If you cause a multi-car accident with injuries, the costs can reach hundreds of thousands of dollars. State minimum coverage is designed to keep you legal, not to keep you financially safe.

How to choose your limits

• Match your assets: Your liability limits should at least match your net worth. If you have $200,000 in assets, carrying only $50,000 in liability leaves $150,000 exposed.
• Consider your income: In some states, a judgment can result in wage garnishment. Your future earning potential is an asset worth protecting.
• Think about umbrella coverage: An umbrella policy adds an extra layer of liability protection — typically $1 million or more — over your auto and homeowners policies at a relatively low cost.
• The cost difference is modest: Increasing your liability limits from 50/100/50 to 100/300/100 might cost only $100 to $200 more per year. The protection increase is substantial for the price.

A common mistake

Many drivers choose the cheapest policy available, which usually means state minimums. Then they are shocked to learn they are personally liable for tens of thousands of dollars after an at-fault accident. The premium savings of minimal coverage rarely outweigh the financial devastation of an underinsured claim.

What Truscott recommends

We recommend at least 100/300/100 for most drivers, with an umbrella policy for those with significant assets. At Truscott, we evaluate your financial picture and recommend limits that genuinely protect you. Request a Truscott coverage review — the cost of proper liability coverage is far less than the cost of being underinsured.