Maximum Liability Auto Insurance Limits

It is important to understand and appreciate how bad third-party claims against you can get, especially if you have a fair amount of assets, which you worked all your life to accumulate for your retirement and family’s future. If your liability car insurance reaches its maximum limits, you will have to cover the rest of the damages out of pocket, even if it means selling everything you own. Once you are found at fault in an accident where there are severe injuries and damages, you are legally liable to pay for third parties’ losses. Financial compensation is only one part of their suffering as some people may never fully recover.

So, it cannot be stressed enough that state minimum liability auto insurance coverage limits are fairly low and may not be enough to pay for all the injuries and damages even in a small to medium accident. The highly recommended and commonly agreed levels of liability limits are 100/300/100, where the policy provides $100,000 coverage for a single Bodily Injury claim and maximum of $300,000 for all injuries in an accident, and $100,000 upper ceiling for the Property Damage claims.

These levels are not hard to achieve as many companies are happy to increase liability limits to these amounts, if it isn’t already offered as standard. And the additional costs should be manageable, especially if you shop around and get a few quotes from various companies. Most automobile insurers offer much higher Liability coverage in their standard policies than the minimums enforced by the states anyway.

The costs can start going up real fast once you want to increase these limits to much higher levels than what the companies are willing to offer within vehicle insurance policies. Companies naturally want to make sure that their responsibilities have a cutoff point and auto insurers want considerably higher premiums in return for going over those ceilings.

Still, motorists can increase the level at $50,000 increments and it appears that $500,000 is the maximum liability automobile insurance limit for most companies in the market and some of them may actually stop at $300,000. So, it may be necessary to look at other options to find coverage for your risks and they may work out a lot cheaper and offer wider protections for your assets.

The obvious choice is to buy Personal Liability Umbrella Insurance when you cannot get enough protection for any future third party claims against you through your car insurance policy.

An Umbrella policy offers at least $1,000,000 coverage over and above auto, home and boat policies as well as covering policyholder’s most actions as a pedestrian and person in general (except professional conduct). That is the lowest floor and they are generally sold in $1,000,000 increments.

The good news is that they are actually fairly cheap for what they offer. Umbrella (or Excess Liability) insurance is expected to cost around $300 to $500 a year for the first million dollars and it may cost further $200 for the next million and so on, depending on the number of cars, homes and boats owned. Of course, the rates may vary depending on your details, insurer and state as well.


In a world where million-dollar houses are commonplace, it isn’t hard to imagine that some people would need a lot more protection against the possibility of getting sued after a car accident they caused. So, they are advised to buy as much liability car insurance as they can get. And look for other solutions like Personal Umbrella policies when they reach the maximum vehicle insurance liability limits they can buy or if it is getting too expensive to increase any more.

Sources: NationalGeneral, StateFarm1, StateFarm2, Kiplinger