Your state's minimum coverage policies provide a good starting point in determining the amount of coverage that you will need. However, it would likely be a good idea to consider getting more coverage than the state requires. If you are in an accident and your insurance cannot cover the full amount of the costs, you will be sued for the remainder. This could lead to you losing any assets you might have, such as your house, in order to pay for the costs of the accident. With medical costs constantly on the rise, there's a good chance that your state's minimums for medical liability insurance are under what would be needed if you got into an accident, leaving you in a precarious situation in which you may be sued.
Bodily injury liability and property damage liability, often abbreviated as BI and PD insurance, respectively, covers the costs you incur when you injure other people or damage their property. The other driver's medical costs will be paid from your BI insurance, and the costs to repair or replace their car will be covered by your PD insurance. When determining how much of each that you need, it is important to weigh your assets against the increased premium you will have to pay with better coverage. If you do not have sufficient car insurance to cover the damage you cause to other people, you will likely be sued and have your assets seized.
If you don't have much in the way of assets in the first place, it would be a good idea to stick to the minimum coverage rates established by your state in order to keep your car insurance premium low. If there isn't much chance that the other driver's lawyer can get enough money out of you to cover the costs of the accident not paid for by your insurance, they might opt not to sue you, since it would be a waste of their time. On the other hand, if you have a house, a business, or multiple cars, it would be a good idea to get more coverage than the state minimums in order to protect your valued assets.
Personal injury protection car insurance, often abbreviated as PIP, is a type of insurance that you can purchase with your plan that covers you and your passengers for medical costs incurred after an accident. It's only available in certain states, and in some of those states it is mandatory. It has the benefit of being blind to fault in an accident – it will cover you regardless of which driver caused the accident. Since it is often not immediately clear who is at fault in an accident, PIP insurance is useful if you need emergency medical attention after an accident since it will cover you immediately without waiting to determine who is at fault for the accident.
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