Auto Insurance: Why State Minimums Aren't Enough

Quick little intro, I have recently begun working in the insurance industry and am starting to see how the different types of coverage effect people, and have come to the conclusion that i want to help people be more knowledgeable about their insurance and the choices they can make. So I have decided to start a blog with some information about different insurance and the types of coverage. This is my first one and it will talk about Auto Insurance and why Minimums are not enough, In my opinion.

Just like me, I'm sure at some point you have had state minimums on your car insurance and just like me I'm sure you thought it was enough. In my state, minimum limits are 25/50/10, meaning $25,000 Bodily Injury per person, $50,000 Bodily Injury per accident, and $10,000 Property Damage. These minimums vary from state to state, some may be lower, and some may be higher.

So lets use an example:

Alice and her 2 friends, Janet and Gloria, were driving to the movies. As they were stopped at a stoplight. James, speeding up behind them, rear-ends Alice and her friends. James only has state minimums, 25/50/10. Alice's medical bills were $15,000, Janet had medical bills of $20,000 and Gloria had medical bills of $28,000. Totaling $63,000. James insurance covers $25,000 Per Person $50,000 Per Accident. Since the total is more than the Per accident amount, the $50,000 would be split proportionately between the three and the remaining $13,000 James is personally liable for. His future wages, home, and assets are all now at risk.

The example above shows the outcome with only medical bills, but in reality, it could end up costing a lot more. Lawyer fees can be included as well and seeing as how society now days is so suit happy, I think it's worth having the extra coverage. In my opinion, the minimums should be at least 100/300/100. The actual cost difference between the two is next to nothing and it offers 4x the coverage.

If you're not sure what your limits are or want to adjust them, all you have to do is reach out to your insurance agent and they would be more than happy to help you.