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. 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. 
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.