Car Insurance Policies: Liability and UM (Uninsured Motorist) Coverage Limits

Author: Claims Consultant Robert L. Mertig

Many states have minimum limits for automobile liability insurance.  In Virginia, this minimum is $25,000 per person and $50,000 per accident.[1] Because car insurance can be expensive, many people are tempted to purchase only the minimum.  There are good reasons, however, to purchase  limits that exceed the 25/50 state minimum.

First, the insurance company’s responsibility is to pay the limits of liability coverage if the injury claim is severe enough and to try and obtain a release on behalf of their policyholder.  The insurance company may not be able to obtain a release if the coverage is not sufficient to compensate the injured person, and the insured person will be personally responsible for the excess.  Thus, many people purchase automobile liability insurance with limits of at least 250/500 to protect themselves in case they are at fault in an accident.

Second, the increased coverage also provides additional compensation to the policyholder if someone else is at fault and the at-fault party does not have adequate coverage to compensate the insured for his injury.  The insured can then look to his uninsured motorist (UM) coverage for additional compensation for his injuries and losses. [2]

I would urge all drivers to contact their car insurance company or agent, and discuss increasing their liability and uninsured motorist policy limits.  It is important that the UM and liability limits are the same.  Unfortunately I have seen instances where an individual reduced his UM limits at the suggestion of his agent to reduce his premium.  This type of action is only advantageous to the insurance company by reducing their exposure.  It is not to the benefit of the policyholder.

I highly recommend that everyone review their automobile liability  and homeowner’s policies on an annual basis to make sure the coverage is adequate and there have been no changes unless requested by you, the policyholder.  It’s not a bad idea to shop around periodically, too, to make sure you are not paying too much.

About the Author: Bob Mertig is a claims consultant working under the supervision of Petersburg car accident lawyer Paul Hux. Bob assists clients in resolving their personal injury claims.


[1] Technically, you are not required to purchase automobile insurance in Virginia; you can instead pay an uninsured motorist fee.  This is a bad idea, however, because if you cause an accident resulting in losses, you are likely to have your driver’s license suspended until you repay all the damages.
[2] Under Virginia law, if your limit is higher than the other driver who is at fault, then after the other driver’s limits is exhausted, then you can recover the difference p to your higher limit from your own company. See Va. Code §38.2-2206 at http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+38.2-2206. Also, you automatically have uninsured and underinsured limits equal to your liability limits, unless you have requested a lower limit in writing. See code section cited above, subsection A.