To protect your assets from a possible lawsuit after an accident, make sure your auto insurance policy has three types of liability coverage:
* Bodily injury. If you cause an accident in which other people are injured due to your negligence, this insurance protects you against their claims for damages such as medical expenses, lost wages, and pain and suffering.
* Property damage. This coverage will pay for any damage you might cause to another vehicle or other property in a collision.
* Underinsured motorist. This coverage pays if you are injured by an unknown driver or a driver who does not have sufficient liability insurance.
When purchasing liability coverage, don’t stint. Coverage is often sold with a per-person and per-loss maximum amount. You may want to buy 100/300/50 coverage, which means that you have coverage of $100,000 bodily injury liability insurance per person, $300,000 total bodily injury liability insurance per accident, and $50,000 property damage liability per accident.