Buying higher auto liability limits is seldom important…until it is. 

Updated: 3/9/2015

1. Buying higher limits can save you significant claim dollars.

Buying higher auto liability limits is seldom important…until it is.  Consider this…the minimum limits that are required in Texas for auto insurance are $30,000 per person for bodily injury/$60,000 per accident for bodily injury and $25,000 per accident for property damage.  If you cause injuries or damage above these amounts, the money to settle the claim is going to come out of your hip pocket.

2. Buying higher limits can save you premium dollars.

This concept is strange but some insurance companies give discounts to new customers that have higher limits on their prior policy.  I guess they have found that customers that purchase higher liability limits have fewer claims.

3.  It’s the right thing to do.

So you’re broke and the saying “you can’t squeeze blood out of a turnip” applies to your finances.  If you have an accident causing big damages, wouldn’t you want to pay for the mess you’ve caused with the proper auto insurance? It’s a risk you take when you don’t go above the minimum limits of insurance. You don’t have the aforementioned “Hip Pocket National” to pay the bills, but you can have the insurance coverage to do so.

4.  Keep the insurance company defending you.

If you cause a big claim, your policy covers the legal expenses if you are sued. There’s no limit on the amount of attorney fees that can be covered under the policy so at least the $50,000 of legal fees will be paid. But there is a BIG catch.  The policy says that when the insurance company exhausts the liability limits, they don’t have to defend you any longer. So if it looks like the legal fees are going to be huge, the insurance company cuts their losses by paying out the liability limits.  To keep the insurance company paying for those large legal fees, buy high liability limits.