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The Sandy Spring Way

Automobile Liability Insurance: How much is enough?

August 5th, 2014 | By Sandy Spring Bank

By Jeff Richards, Vice President, Sandy Spring Insurance

Sandy Spring Bank Automobile Liability Insurance

As I glance back at my younger years, I realize one thing is constant: Life has been full of surprises. One vivid memory which spawned quite a surprising series of events occurred when I was 28, a new father, and a new insurance agent on my way to the first day of training to become a volunteer firefighter in Southern Maryland. As the weather in the Mid-Atlantic can sometimes be unpredictable and surprising, it had just started to snow as I unfortunately rounded a corner too quickly. The result? I smacked right into a car coming the other direction. Thankfully, I was only going 10-15 miles per hour and no one was injured (or so I thought!).

My car was barely damaged and the estimate for the other driver’s car was limited.

To my surprise, I received a letter from my insurance carrier three months later stating that I was being sued for more than my policy limits. The letter also noted that I might want to retain my own counsel, as they would only defend me up to my policy limits. Evidently, the person I hit discovered neck pain three days after the accident.

For the next nine months, I was concerned what surprise might come next, and I was worried about the limited funds that I had for a lawyer and any judgments stemming from the case. Fortunately, the case was settled for $2,000 less than my policy limit. I was fortunate, but this experience motivated me to review what higher liability limits would cost, and confirmed that I could gain peace of mind for an additional $60 per year. Needless to say, I didn’t waste any time.

So how much is enough when it comes to Automobile Liability Insurance?

The minimum coverage in Maryland is 30/60/15. This means that if an accident is your fault:

  • Your insurance carrier will pay up to $30,000 for each individual’s injuries which includes medical bills, loss of work, pain, and suffering
  • Your insurance carrier will pay up to $60,000 total if there is more than one person in the other vehicle
  • Your insurance carrier will pay up to $15,000 in property damage for the car you hit

Typically, this is not adequate coverage and most agents recommend no less than 100/300/100 limits or even higher, based on your needs.

Two key components determine how much coverage you need:

1) Your assets.

2) Your peace of mind.

In the event you are sued for more than your policy limits, your assets can be at risk for satisfying any judgments against you.

If you haven’t reviewed your policy recently, you should schedule a meeting with your agent to make sure you are properly covered and plan to meet yearly to review your changing needs. Your peace of mind in knowing that you have adequate protection for your needs, no matter how surprising, is well worth the few extra dollars it costs to protect yourself.

If you’d like to learn more about how Sandy Spring Insurance can help with your insurance needs, click here.
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