Ever wonder why the cost of auto insurance can vary so drastically? Aside from the obvious factors such as age and driving history (let’s face it, a 16 year-old with two speeding tickets and an accident is going to be much more costly to insure), the limits of coverage you select have a major impact.


When you determine what amount of coverage you want, what you’re buying is a maximum amount that your insurance company will pay on your behalf. If you get the minimum required by law ($25,000 in Ohio) and you’re in an accident that causes $70,000 in damages, your insurance company will write a check for $25,000 and walk away.

They’ve fulfilled their obligation based on what you indicated you wanted when you purchased the policy.

So it stands to reason that a driver who only wants $25,000 of coverage is going to pay much less compared to a driver that’s slightly more concerned about having adequate insurance coverage, such as a $500,000 limit.

And while there are six main coverages in an auto insurance policy, there are numerous options to consider for each coverage.

How much insurance do you need?

With the advice and guidance of a knowledgeable, experienced insurance advisor, you can get the answer to this question.

We’ll start with the basic coverage options.

Bodily Injury Liability

Bodily Injury Liability coverage pays the medical and other expenses of those people injured or killed in accidents for which you’re at fault.

You can buy the minimum required by law, $25,000 per person, $50,000 per accident in Ohio. Or you can buy limits as high $1 million. Remember that someone you injure can sue you for everything you have – which includes your future wages.

Tip. If you have a home, own stocks and have a decent income, you should probably buy, at minimum, limits of $250,000 per person, $500,000 per accident. AND, you should seriously consider including an Umbrella Policy. Consult with your professional agent about this.

Even someone with little net worth can be sued for millions in damages. If owned assets are insufficient to satisfy the judgment, future wages can be garnished until the judgment is satisfied.

Remember, you don’t have to have $1,000,000 to be sued for $1,000,000!

Many auto insurance companies now sell what are called combined single limit (CSL) coverages, which have no per-person limit. If you buy, say, $500,000 CSL, that means your policy will pay a maximum of $500,000. All of that could go to one person, if needed.

Some companies include property damage liability in the CSL, which means that if you total someone’s antique car, your policy could pay up to $500,000 for property damage. CSL coverage costs more than traditional limits, but it can be worth it certain types of claim situations.

Property Damage Liability

This coverage is for the damage you cause to other’s property – their vehicle when you rear-end them for example.

Several years ago, $25,000 was considered the maximum most people needed for this coverage.

Not anymore!

$50,000, $60,000, even $70,000 cars and sport utility vehicles are commonly seen on the road these days.

Tip. Because of the increasing number of expensive cars, you should seriously consider at least $100,000 of coverage, assuming you don’t have CSL coverage. Again, an Umbrella Policy can help in this situation as well.


Collision coverage pays for damages to your vehicle when you collide with other vehicles (when you’re at fault), or with objects.

Consider how much you can afford to pay to have your car fixed if you have an accident. Auto policies have several deductible options.

Note. The deductible is the part you pay before the insurance kicks in. You can buy deductibles such as $100, $250, $500, even $1,000. Obviously, the lower the deductible, the more this coverage will cost.


Because your insurance company is more likely to pay a claim, or at a minimum, they’re going to pay more when a claim occurs.

Let’s assume you chose a $100 deductible. You’re driving on an icy road, slide into a guardrail and do $1,200 worth of damage. You pay $100 and your insurance company pays $1,100.

Now imagine you had a $1,000 deductible. More out of your pocket? Yes. But your premium is reduced in return for you selecting the higher deductible so if you don’t have a claim (or you have several years without any claims), the premium savings could offset the higher deductible amount you’d have to pay.

Unless you’re planning to have a lot of accidents, it’s probably a good idea to have a deductible of at least $500. (By the way, the deductible does not apply if you are hit by someone else and that person’s insurance is used to pay for your car’s damages.)


Also known as ‘Other than Collision,’ this provides coverage for damage to your vehicle caused by claims that are: well, other than collision. Examples include theft and vandalism.

Like collision, there’s a deductible with comprehensive, although it is often lower. For example, if you have a $1,000 deductible for collision, your comprehensive deductible might be $500.

Note. While collision and comprehensive will pay for the damage or loss to your car, neither coverage will pay for everything on or in your vehicle. Most policies exclude things like cell phones and CDs.

Further, if you add special features to pickups, vans or SUVS, these things probably will be excluded as well. In fact, it’s a good idea for you to talk to your insurance agent about any high-tech equipment or special features you have added to your vehicle.

Many, perhaps even most, of these features aren’t covered in the standard policy. It’s possible, however, to obtain special coverage for the high-tech equipment or special features in your vehicle. Your agent can advise you of the options.

Medical Payments

Medical payments coverage provides protection for passengers in your vehicle for medical expenses incurred. In some states, medical payments coverage is not relevant. These are states that have so-called no-fault auto insurance systems.

Ohio is excluded from the no-fault system so most people choose to purchase medical payments coverage. The most common amounts purchased are $5,000, $10,000 or $25,000.

Why such low limits?

There are two primary reasons people elect to purchase a smaller amount of coverage for Medical Payments:

  1. Since it’s a first-party coverage (meaning it’s coverage for you and your passengers, not people you injure in an accident – see Bodily Injury coverage above for this situation), the lawsuit exposure does not exist
  2. Most people have health insurance (or you should, since it’s required by law now), so they can rely on this coverage if their medical expenses exceed the amount of coverage provided by their auto policy

Uninsured/Underinsured Motorist

This coverage is also a first-party coverage, but it only applies to situations where you’re involved in an accident for which you’re not-at-fault, AND the driver that is at fault either:

  • has no insurance (Uninsured), or
  • has insurance, but not enough to compensate you for your injuries (Underinsured)

Most people select the same limits for UM/UIM as they have for bodily injury liability. But remember, UM/UIM coverage is for you. It pays for your injuries.

While there are general guidelines when selecting the appropriate amount of coverage for you and your unique situation, this is where the advice of a licensed insurance advisor can really help. You certainly don’t want to overpay for your insurance, but what’s even worse is finding out you don’t have enough coverage when a serious claim occurs.

If you’d like to learn more, contact one of our Licensed Advisors . We’re here to help.