Liability coverage helps pay for injuries and property damage you cause to others in an accident. Every state sets its own minimum requirements, but those minimums can be quite low compared with the cost of a serious crash. If damages exceed your limits, you could be personally responsible for the difference.

As your income, savings or home equity grow, you may have more to protect. Renewal is a natural time to revisit this. Consider whether your current limits would realistically cover a bad accident involving injuries or a newer vehicle. Higher limits often cost less than people expect, though the price varies by insurer and driver.

This is a good question to bring to a licensed insurance agent, who can explain how different limits work and whether an umbrella policy might make sense for your situation. Choosing the right level of protection is a balance between your budget and your exposure to risk, and only you can weigh that.