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[Infographic] Buying Minimum Liability Insurance Limits Could Cost a Bundle

Minimum Liability Limits

Are state minimum auto insurance limits right for you?

When I was a young man, just getting started I had to learn to manage my life on a budget. This was eye-opening. I took for granted what my monthly expenses where, because my parents paid them.

One of the thing I took for granted was my auto insurance.

Quickly I learned that the state actually mandates that we purchase auto insurance, so I was going to have to purchase it. But they only required that I purchase the state minimum limit. So, that’s what I bought … because I needed to save the money.

In my early 20’s, I got my fair share of tickets, and state minimum limits were actually all I could afford, but that’s a topic for another day. 🙂

What are the California State Minimum Auto Insurance Limits?

Here in California, the state mandated minimum limits are actually pretty low at $15,000 per person and $30,000 per accident for bodily injury, and $5,000 for property damage. Many other states require $20,000 per person and $40,000 per accident or higher, and for property damage it is very rare to see a state below $10,000 for property damage.

But if you’re meeting your state’s minimum liability limits, are you really meeting your needs to adequately protect yourself?

Are State Minimum Limits Good Enough?

We’ve created the infographic below to illustrate a point, that just having insurance doesn’t mean that you are properly covered, and you DO run the risk of being underinsured. Underinsured is just a fancy way of saying that the limits of liability you’ve purchased aren’t enough to cover the damages you caused during an accident.

When you don’t purchase enough insurance to cover you when you have an accident, you run the risk of having to pay money out-of-pocket to cover the uninsured portion of a loss. No Bueno!

In fact, we recently wrote a post about an Oregon driver who found himself in just this scenario when he struck an expensive Italian sports car from the rear. So this happens.

Minimum Liability Limits

In the case we illustrate in the infographic above, because the limits were not high enough to cover the financial responsibility in the accident, the policyholder would potentially have to pay thousands of dollars out-of-pocket. Scenarios like this are preventable if you raise your liability limits.

Sure, an increase in coverage will increase your monthly payments, but the change is often much less than you think, and the value received is normally greater in proportion to the increase in your payment.


Like when I was a young man, maybe you simply cannot afford to purchase more insurance. That’s fine. Don’t buy more than you need or can afford, but if you’re making a choice to simply save money … that you’re going save money and absorb the risk on your own, this could be a costly mistake.

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