Why Liability Coverage Might Be the Most Important Part of Your Auto Policy
You’ve got car insurance, right? Great. But do you know if your liability limits are high enough to protect you in a serious accident?
Many drivers focus on covering their own vehicle—collision coverage, comprehensive coverage, roadside assistance—but forget to take a closer look at auto liability insurance. The truth is, liability may be the most important part of your entire policy. It’s what protects you if you cause an accident that injures someone else or damages their property.
If your limits are too low, you could end up paying out of pocket for medical bills, legal fees, and court judgments—and those numbers add up fast.
Let’s dive into why car accident coverage starts with strong liability protection and how to make sure you’re not leaving yourself exposed.
What Is Auto Liability Insurance?
Auto liability insurance is the part of your car insurance policy that covers damage and injury you cause to others in an accident where you’re at fault. It typically includes two main components:
1. Bodily Injury Liability (BI)
Covers medical expenses, lost wages, and legal costs if you injure someone in an accident. This includes:
- Drivers and passengers in other vehicles
- Pedestrians or cyclists
- Legal defense if you’re sued
2. Property Damage Liability (PD)
Covers the cost to repair or replace someone else’s property—usually their car, but also includes fences, mailboxes, or buildings you might hit.
Note: Liability coverage does not cover damage to your own vehicle or injuries to you or your passengers. That’s handled under different parts of your policy.
Why Liability Limits Matter
Most states—including Maryland—require drivers to carry minimum liability limits. But those state-mandated minimums are often far too low to cover the full cost of a serious accident.
For example, Maryland’s minimum required liability coverage is:
- $30,000 for bodily injury per person
- $60,000 for bodily injury per accident
- $15,000 for property damage
Now imagine this scenario: You’re involved in an accident where two people are injured and their medical bills total $100,000. If you only have the state minimum ($60,000 per accident), you could be personally responsible for the remaining $40,000—plus legal fees.
That’s why many insurance professionals recommend limits of at least:
- $100,000 per person
- $300,000 per accident
- $100,000 for property damage
Or even higher, depending on your assets and risk profile.
Real-World Costs of an At-Fault Accident
Let’s take a closer look at what a serious accident might cost you if you don’t have sufficient liability coverage:
| Accident Type | Estimated Cost |
|---|---|
| Emergency room visit (per person) | $3,000–$5,000 |
| Surgery or hospital stay | $30,000+ |
| Vehicle replacement (mid-range SUV) | $40,000–$60,000 |
| Legal fees if you’re sued | $10,000–$50,000+ |
| Lost wages or long-term disability | $100,000+ |
One accident could easily wipe out your savings or result in wage garnishment or liens if you’re found liable and underinsured.
Umbrella Insurance: The Extra Layer You May Need
If you want additional peace of mind, consider adding an umbrella policy. This is a separate insurance policy that extends your liability protection, typically in increments of $1 million.
Umbrella insurance kicks in when your auto (or home) liability limits are maxed out. It’s an affordable way to protect your long-term financial health—especially if you have savings, own property, or have a high net worth.
Signs You May Need Higher Liability Limits
- You own your home or have significant assets
- You drive regularly in busy or high-risk areas
- You have a teen driver on your policy
- You carpool, commute, or carry passengers frequently
- You want to avoid personal financial risk after an accident
If any of these apply to you, it’s time to reassess your liability coverage.
How to Check (and Increase) Your Liability Limits
You don’t need to wait until renewal time to make a change. Here’s what to do:
- Review your current policy: Look at the declarations page to see your existing liability limits.
- Call your insurance agent: Ask for a quote on higher limits—it may be more affordable than you think.
- Bundle and save: If cost is a concern, bundling your auto and homeowners insurance can offset the increase.
At Famous & Spang Insurance, we’ll walk you through the options and help you find a balance between cost and protection that works for your situation.
Don’t Wait Until It’s Too Late
Auto liability insurance isn’t just a box to check on your policy—it’s the financial firewall that protects you from lawsuits, medical bills, and unexpected damage claims.
If you haven’t reviewed your limits lately, now’s the time. A quick conversation today could save you thousands tomorrow.
Call Famous & Spang Insurance at 410-272-2300
or
Visit famousspanginsurance.com to schedule a policy review and make sure you’re fully protected.
Because in the event of an accident, your coverage shouldn’t come up short.
