Every state sets minimum liability coverage a driver must carry. Those figures were established to make insurance affordable rather than to cover the cost of a serious crash.
Liability coverage pays other people, not you
Bodily injury and property damage liability respond to claims from those a driver injures or whose property is damaged. Neither pays for the policyholder's own car or injuries.
Coverage is quoted as three numbers: injury per person, injury per accident, and property damage. Each applies separately, and the per-person figure is often the binding one.
A driver carrying only the minimum has satisfied the law. That is a different question from whether the coverage is adequate for a crash they cause.
The limits have not tracked costs
Minimums in many states were set long ago and revised rarely. Medical treatment and vehicle repair costs have risen substantially in the same period.
Modern vehicles contain sensors, cameras and structural materials that make even moderate collision repair expensive. Property damage minimums are exhausted easily.
An injury claim involving a hospital stay can exceed a per-person minimum quickly. The gap is not a remote scenario but an ordinary outcome of a serious accident.
Exhausted limits become personal liability
When a claim exceeds policy limits, the insurer pays up to the limit and the remaining amount is the driver's own responsibility.
Judgments can attach to wages and assets depending on state law. This is the risk minimum coverage leaves in place, and it falls on the person, not the policy.
Raising liability limits is usually inexpensive relative to the added protection, because severe claims are uncommon and the additional layer is priced accordingly.
Uninsured motorist coverage addresses the mirror image
If the at-fault driver carries minimum limits or no insurance, the injured party's recovery is capped by that policy. Uninsured and underinsured motorist coverage fills the gap.
Availability and whether it is mandatory differ by state. Where optional, it is frequently the most useful coverage a careful driver can add.
Its value scales with how many minimum-limit drivers share the road locally. A careful driver cannot control the coverage carried by the person who hits them.
Underinsured coverage is the more commonly used half, because most at-fault drivers carry some insurance and simply do not carry enough for a serious injury claim.
Umbrella policies sit above the auto policy
A personal umbrella provides additional liability coverage across auto and home policies once their underlying limits are exhausted.
Insurers generally require specified underlying limits before issuing one, so an umbrella is not a substitute for adequate auto liability coverage.
Requirements, mandatory coverages and legal remedies vary by state and change over time, so anyone reviewing limits should confirm current rules where they live.