If you answered yes to owning any of the above-mentioned assets, then you need to understand how to protect those assets in the event you cause an automobile accident, or someone driving your vehicle is at fault in an accident. Your bodily injury and property damage coverages are the coverages on your auto insurance policy that financially protect you if you are at fault in an automobile accident.

If you are determined at fault in an accident and do not have adequate liability coverage, that is enough to cover the injuries and damages to the other party, and you are sued by the other party?s insurance company, the court could order you to pay the amount that exceeds your limit of Liability coverage.

You would, then, have to dip into your personal assets to cover the amount ordered paid by the court. The court could place a lien on your home and other assets if the other party?s insurance company requested it. Even if you don?t own any assets, but you have a career and a steady job, you could have a judgment placed on your credit report. This could affect your ability to borrow money for up to seven years.

Therefore, if you own a home, bank accounts, stocks, mutual funds or have a reasonably well paying job and career, you should buy more Liability coverage than the minimums required by law.

Anyone in this position should have a minimum amount of liability coverage on their auto insurance policy to protect those assets. Most companies recommend bodily injury liability of $100,000.00 per person, $300,000.00 per accident, and property damage liability of $100,000.00 per accident.

Keep in mind the cost of medical and hospital treatment today as well as the cost of any new luxury vehicle. The minimum liability standards for most states were selected years ago and are seriously outdated. How many cars driving on the highways today cost more than fifty thousand dollars? Lots!

Umbrella policies are also available in one million dollar increments to give you additional liability protection if you are ever involved in an at-fault accident. These policies are usually very cost effective. Your auto or homeowners insurance carrier should be able to quote you on this type of policy.

About the Author Barry Brenner is a licensed auto insurance agent and the author of Money Saving Tips About Car Insurance. For the consumer edge on understanding car insurance, you can subscribe to his popular newsletter at: www.moneysavingtipsaboutcarinsurance.com Contact the Author