Bodily Injury Liability 50000/100000. Too high, low or about right?
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I know a guy who has (had?) a modified car, pushing about 600hp. He loved that car, it was his baby. He took photos of it, took it to the drag strip, went to car meets, made a web page about it, etc.
Ended up running into someone while driving his minivan with his family, t-boned the other party, doing about 40mph in a 35mph zone. In other words, not exactly a horrific crash, everyone walked away.
This other party though, they did some investigating and found out all this information about him, found out about his car, then painted him as a reckless speed demon in court and they sued him for a million dollars. His insurance was only for $100k. I haven't heard anything recently about the case, but it dragged on for years and years, I think he eventually settled for something like $250k. He always made a point about carrying the max amount of insurance you can after that.
I actually have 250k/500k/100k limits (the last one is property damage), have had for some years when I switched to this agent. It was probably high initially but it feels about right now. I don't think it saves a lot going lower. I haven't had an at-fault accident so any risk rating on me should be low. These limits are higher than I remember from about 25 years ago in my family, where we always had 100k/300k/50k.
I still carry uninsured/underinsured, but I dropped any collision/comp a few years back. I think I've saved more than the value of my car by now, or pretty close to it. 13.5 years old, 220k miles, not worth that much. Has a high comp risk so getting it covered even with $500 deductible costs a few hundred per year, basically doubles my cost or thereabouts.
Generally the best means of obtaining insurance is to find an umbrella insurance coverage policy with limits of $1 million, or if you can afford it $5 million. Then purchase only the required amount of underlying liability coverage. Typically a $1 million liability policy will require $100,000/$300,000 underlying coverage.
Unless you have no assets, $1 million is the minimum coverage you should have. $5 million makes more sense.
Generally the best means of obtaining insurance is to find an umbrella insurance coverage policy with limits of $1 million, or if you can afford it $5 million. Then purchase only the required amount of underlying liability coverage. Typically a $1 million liability policy will require $100,000/$300,000 underlying coverage.
Unless you have no assets, $1 million is the minimum coverage you should have. $5 million makes more sense.
I have an umbrella policy. However, the critical factor is that you need to make certain that the policy not only increases liability limits, but underinsured and uninsured motorist coverages as well. When you obtain such a policy you need to specifically ask you insurance agent if these coverages are included as well. If they are not, consider insurance with another agency. I promise some companies sell umbrella coverage that increases all of the coverages in question.
Otherwise, all your paying for is for someone else to get compensated when you are at fault.
Last edited by markg91359; 10-10-2013 at 09:23 AM..
It really depends on how every other situation is, currently. If you have little assets but good health insurance, then there is absolutely no reason from an economic standpoint to have any more than bare minimum coverage. Since the health insurance would take care of any injury you receive from an accident and the other party will have a hard time recovering if you... don't have any money.
If on the other hand you don't have health insurance, then I'm with the other posters - have enough to cover for the other motorists doing something cute. And of course, the one in a billion shot you hit a church bus full of children and it explodes.
Edit: I should explain - I have good health insurance, and I only carry comprehensive and collision to the tune of 25/50/25 - enough to cover a new vehicle if I need one. If I hit a church bus, they can sue me all they want - they aren't getting anything. (I don't have any money.) At 23 I can ill-afford paying even one more dime than I currently do on car insurance, despite a completely clean driving record - I'm still paying almost $100 a month.
I know this is a bit late to quote, but...
I hope NO ONE is listening to hensleya; he/she completely misunderstood auto insurance.
1. Even if you have no asset, they can always garnish your paycheck (at least in CA this is true).
2. The 25/50/25 that he/she had has nothing to do with "covering a new vehicle" should he/she needs one - that's what comprehensive & collision coverage is for. The 25/50/25 are for liability and property damage (to another party).
3. Well, but he/she was only 23. Who takes advise from a 23 year old anyway?
I hope NO ONE is listening to hensleya; he/she completely misunderstood auto insurance.
1. Even if you have no asset, they can always garnish your paycheck (at least in CA this is true).
2. The 25/50/25 that he/she had has nothing to do with "covering a new vehicle" should he/she needs one - that's what comprehensive & collision coverage is for. The 25/50/25 are for liability and property damage (to another party).
3. Well, but he/she was only 23. Who takes advise from a 23 year old anyway?
Hensleya is young and because of that I give him some leeway on some of his comments.
I remember being young and trying to get car insurance. Its expensive. I remember feeling great moral indignation at my high insurance rates. I never caused an accident when I was in the 16-25 year group (highest insurance rates). I think I got all of one speeding ticket. Lastly, I even qualified for the "good student discount". Nevertheless, I paid what I thought were very high rates for car insurance. As I've gotten older, I understand the system better. Auto insurers charge rates based on their claims experience. Their experience is that even a responsible driver in the 16-25 year age group who gets good grades in school and who seldom receives a ticket is a higher risk than other groups are. Part of it has to do with inexperience driving. Part of it has to do with the fact that young drivers tend to be on the roads when it is dark more often than older drivers. Part of it is simply due to men and our testosterone and our willingness to take more risks than women take.
However, Hensleya basically gave an opinion that suggested it was all right for him to have the very lowest limits of car insurance for two reasons:
1. He had health insurance to cover his medical bills.
2. He had few assets and would be "judgment proof" against a badly injured person who sued him.
First, Hensleya would find out quickly that his health insurance doesn't cover all his medical bills. It would likely cover about 80% of them and he would be on the hook for the rest. He would learn his health insurance doesn't pay for other expenses such as lost wages. He'd have no way to pay his rent, his utilities, or food when he gets out of the hospital. He might have a permanent injury, but there would be no compensation for the fact that he is "less than the average person" now because his injuries preclude him from doing the same things that uninjured people could do.
Second, he than argues that he is judgment proof and doesn't need to worry about compensating others that he badly injures. Maybe we have reached a point in this world where people honestly don't give a damn what happens to others. The truth is, that if I badly hurt or killed someone in a car accident that I would want that person (or his family) to be fairly compensated for what I had done. That can only be accomplished by maintaining high limits of insurance. Also, remember some of those injured people may be your own family members or friends who were riding in the car with you when you ran through a stop sign by mistake and caused a major accident. I would hope we would at least want those nearest and dearest to us to be fairly compensated.
These are just some things to think about. There is more involved in getting good car insurance than we imagine at first glance. It deserves real thought. Not just an attempt to get the cheapest that we can get.
Your reasoning for carrying the highest amount of liability coverage only makes sense if you don'y have decent health insurance. If "some clown" without insurance hits you and causes catastrophic injuries, your health insurance will pick up the tab.
Some very good info from markg91359. I just looked at my policy that renewed last week. Three cars, Liability 250/500/250 and uninsured motorist 30/60/50 in Texas. I’m 75, wife 73, no tickets or accident and retired. Total cost for one year $3,165.58, if I pay the total $2,861.72. I also have a 1 mil umbrella @ $331.
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Has a high comp risk so getting it covered even with $500 deductible costs a few hundred per year, basically doubles my cost or thereabouts.
