Why Carrying Higher Liability Limits Is Smarter Than Sticking to State Minimums
When it comes to auto insurance, many drivers choose the state minimum liability limits simply because they’re the cheapest option. While this may save a few dollars upfront, it can expose you to serious financial risk if you’re ever involved in a major accident. Carrying higher liability limits isn’t just a “nice to have”—it’s a smart financial decision that protects your future.
What Are Liability Limits, Anyway?
Liability insurance pays for injuries and property damage you cause to others in an accident. Most states require drivers to carry a minimum amount, often written as three numbers, such as 25/50/25:
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$25,000 for bodily injury per person
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$50,000 for bodily injury per accident
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$25,000 for property damage
While these amounts may have been adequate decades ago, today they often fall far short of covering real-world accident costs.
State Minimums Are Often Not Enough
Medical expenses have skyrocketed. A single emergency room visit, ambulance ride, or surgery can easily exceed $25,000. Add in physical therapy, lost wages, and potential legal fees, and the costs can multiply quickly.
Property damage is no better. The average new vehicle costs well over $40,000, and many accidents involve multiple vehicles. If you total a newer car, $25,000 in property damage coverage may barely scratch the surface.
When your insurance limits are exhausted, you are personally responsible for the rest.
Protecting Your Assets and Income
If you’re found at fault in an accident and damages exceed your coverage limits, the injured party can pursue you directly. That could mean:
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Lawsuits
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Wage garnishment
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Bank account levies
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Liens against your home or other assets
Even if you don’t consider yourself “wealthy,” your future income is still an asset worth protecting. Higher liability limits act as a financial shield between you and these risks.
Higher Limits Are Surprisingly Affordable
One of the biggest misconceptions about higher liability limits is that they’re expensive. In reality, increasing your limits from state minimums to something like 100/300/100 or 250/500/250 often costs only a few extra dollars per month.
When you compare that small increase to the potential six-figure financial exposure of a serious accident, the value becomes obvious.
Better Protection for Serious Accidents
Minor fender-benders are common, but it’s the rare, severe accidents that cause the most damage—both financially and emotionally. Higher liability limits ensure that injured parties receive proper compensation without putting your personal finances at risk.
They also reduce the likelihood of lawsuits, since there’s enough insurance money available to settle claims fairly.
Peace of Mind Is Priceless
Driving always carries some level of risk, no matter how careful you are. Higher liability limits provide peace of mind, knowing that you’re protected if the unexpected happens. Instead of worrying about “what if,” you can focus on driving with confidence.
The Bottom Line
State minimum liability limits are designed to meet legal requirements—not to fully protect you. Carrying higher liability limits is one of the most cost-effective ways to safeguard your assets, income, and future.
If you want real protection, don’t ask, “What’s the cheapest coverage I can buy?”
Ask instead, “What coverage would I want if I were on the other side of the accident?”
That answer almost always leads to higher liability limits—and smarter insurance choices.
Steve Pore has been an insurance agency owner since 1976 originally with a Farmers Insurance then as an Independent Agency Owner since 2014.
You can rech Steve @ (800) 569-0462