Insurance liability amounts (vehicles, auto, chip, buy)

[ak_47_00]

What is a safe amount to carry? I know the state mininums, but I wanted something which would cover me if I were to hit someone. I feel 25/50/25 would suffice. I know there is no right or wrong answer for this. Right now I basically having nothing to my name, if this helps. I'm a 24 y/o student.

AK

[Drover]

Get enough to cover your assets. That's the purpose of insurance. No need for a $300K policy limit if you don't have $300K in net assets and don't reckon you will any time soon. If you're a broke college student with nothing to your name, consider getting the statutorily minimum coverage.

[ak_47_00]

I guess I don't fully understand this 100%. I know I could call the insurance company, but it's easier to ask here.

If I hit a car worth alot and medical expenses were much over what my policy covered would it be possible for me to get sued for money I don't have now, but will have in say five to ten years? I know I will have good money in a few years, but right now all I have is debt.

[Drover]

There's a concept in civil law called being "judgment-proof." What that basically means is, "I won't bother suing that guy because he simply doesn't have the money to pay me, the chances of ever collecting a substantial portion the judgment are small, and it won't be worth the legal expenses." Broke college students are, by and large, judgment-proof. That isn't the case if, say, your parents happen to be on the title (they'll go after your parents too), but that's another story. Also, most people carrying anything more than liability will have uninsurance/underinsurance coverage, meaning if they hit someone like you whose policy limits don't cover the damage and you have no assets to go after, they're going to go to their own insurance company to collect the difference. It's a lot easier for them to do that than to come after you. If someone is carrying liability only, chances are they're driving a POS anyway.

There is a time frame for collecting a judgment. If a judgment is made against you, it doesn't hang over your head forever. How long you will be held liable for paying up varies from state to state, but I think 10 years is about standard. So if you want to buy insurance against the possibility of having collectors scraping the bottom of your barrel for pennies for whatever the statutory collection period is where you live, consider upping your policy limits. Otherwise, just cover your net worth.

[ak_47_00]

Thanks Drover, for helping me out here. I am a careful driver. My only accident was the result of someone hitting me head on. I think I'll be good with the state minimum for a few more years here.

[Drover]

Just remember to review your policy limits periodically as your assets accumulate (bought a house, some 401K money, etc.)

[Bummer]

Originally Posted by ak_47_00

What is a safe amount to carry? I know the state mininums, but I wanted something which would cover me if I were to hit someone. I feel 25/50/25 would suffice. I know there is no right or wrong answer for this. Right now I basically having nothing to my name, if this helps. I'm a 24 y/o student.

AK

Good question, Ak

A major point to remember is the premium increases very little when you raise your liabiliy limits. Check the premium for the state minimums and then consider doubling or tripling for only a few bucks more a month for peace of mind.

Bottom line . . . it is better to be safe than sorry.

[Drover]

True... I overlooked the cost-benefit analysis of higher coverage limits. If it's only a few bucks more per month to add a little assurance against a judgment reaching you personally, go for it.

[greggd]

Originally Posted by ak_47_00

What is a safe amount to carry? I know the state mininums, but I wanted something which would cover me if I were to hit someone. I feel 25/50/25 would suffice. I know there is no right or wrong answer for this. Right now I basically having nothing to my name, if this helps. I'm a 24 y/o student.

AK

It doesnt really matter how old or what your financial situation is. If you hit someone, and its your fault, you will be billed. It will follow you around.
I specifically know people who have judgements against them for several thousands of $ due to auto accidents.

In Los Angeles, I would suggest you purchase a minimum:

Bodily Injury, Per Person: $100,000 (covers occupants of other car)
Bodily Injury, Per Accident: $300,000 (aggregate liability per accident)
Property Damage: $100,000...(damage to other vehicles, property)
Medical Payments: $ 25,000 (per person,occupants in your car)

Uninsured Motorist: UM $100,000. (covers your injury, damage)
U.M. per accident: $300,000. (aggregate for one accident)
Comprehensive: This coverage is cheap.. fire, tree falls etc.
Collision: covers damage to your car, say if its parked or you hit a tree, post etc. optional depending on car age/value.

Also price the waiver of collision deductible option, its cheap and waives the 500, or 1,000 deductible

There are alot of $100,000+ cars running around los angeles, If you collide with an AMG, Bentley, or any exotic.. your in for a ride. Minor collisions can lead to $30,000+ repairs on some of these cars. A small chip in the paint can lead to a total repaint of the back half of a car. They dont touch up, they re-paint the panel.

Insurance Co's Subrogate payments they make on both uninsured and underinsured motorists and they are ok with waiting 5, 10, 20 years to collect.

If you go to a quality co, you can buy a renter policy and generally they give you a discount on both. That may actually save you more on the auto insurance, than the total cost of the renter policy. If you can get on your parents policy that would be an even better option since ins. co's give multi car discounts.

[Drover]

Originally Posted by greggd

In Los Angeles, I would suggest you purchase a minimum . . .

Excellent advice for someone reporting to be from Ohio.

100/300 coverage for someone who has practically nothing to their name? Forgive me for being so bold, but that's way beyond overkill.