Auto insurance limits

[dparm]

For years I've carried the same level of liability/medical/property damage/uninsured coverage on my policy. It's far from the state minimum but definitely not the maximum.

I know that people will sue for almost anything and your insurance will cover that, but only up to your policy amount. Plus today's medical bills can grow to be ridiculous in size.

How does one determine the proper level of coverage? How do I know if I'm 'over-insured' or 'under-insured'?

(bear in mind I do not drive to work, and my yearly mileage is around 6-7k)

 

[SteveSRT8]

These days you need to have more than you think. As you already know, too much will get a hungry attorney all excited.

As an example, one of my competitors had a truck plow into a home when the driver passed out. he only had 50k of liability, and it cost 65k to fix the house!

There are any number of cars and SUV's you can hit that cost more than 50k. So I pretty much run 100/300/100 on everything these days.

You may also wish to consult an attorney for realistic advice as well.

 

[dparm]

Right, I've run 100/300/100 for as long as I've been driving but you can get in excess of $500k and even up to $1m. It's not terribly expensive to bump up to that level of coverage, but at a certain point I see it as money down the drain (short of causing a 30 car pileup).

 

[Boomer]

Also, you should take a $1,000,000 liabilty cap (umbrella) over your house and car. Such a policy is about $125-150/year and well worth the money. You can go higher if you want. My old employer always told all salaried people to carry such coverage as lawyers went after people with the titles of manager, scientist, etc. after an accident. I have had such a policy now for almost 30 years.

 

[sciphi]

If one has enough coverage to cover all the costs in an accident and replace the most expensive car or item they're likely to hit in their regular driving, it's enough coverage. A minivan can cost $50k these days, and some pickups are $60k. By the time injuries, if any, are paid out, if it's likely to run right up to the $100,000+ range if 2-3 people need large medical bills covered.

I'd say at least $300,000 in liability insurance is the minimum to carry these days.

 

[JayhawkRoy]

Talk to your insurance agent about wrapping a personal liability umbrella to take care of your additional liability that you may be concerned about. Mine requires that I keep a minimum level of auto insurance on my auto policies, and then kicks in if those limits are exceeded.

Advantage is that the umbrella covers much more than just auto accidents. I have $1 million coverage.

 

[volk06]

State farm for me when I last got a quite was $97/year for a $1 million dollar umbrella policy.

 

[Doog]

I have a $3million umbrella but it is expensive unless I need it then it is very cheap. My premium is expensive because of kids driving. Once they are all out of the house it will go down dramatically.

 

[Oregoonian]

I had an attorney friend who's company represented a major auto insurer (AllState). He told me that if you get into a major accident....the higher your liability coverage.... the better attorney representation you will get....because of the high dollars the insurer is exposed to. IMO....that makes complete sense.

If you don't have many assets, lower liability might be OK....but 100/300/100 should be OK for most. Those with higher assets need to go higher (umbrella policy), because of the potential amount they are exposed to.

 

[KrisZ]

Originally Posted By: Oregoonian
I had an attorney friend who's company represented a major auto insurer (AllState). He told me that if you get into a major accident....the higher your liability coverage.... the better attorney representation you will get....because of the higher dollars the insurer is exposed to. IMO....that makes complete sense.


Gee, you mean to tell me that a lawyer gave you advice, which could potentially make him more money, out of the goodness of his heart? How noble of him, I bet he tells the same to all of his clients, not just his friends.

 

[Oregoonian]

Originally Posted By: KrisZ
Originally Posted By: Oregoonian
I had an attorney friend who's company represented a major auto insurer (AllState). He told me that if you get into a major accident....the higher your liability coverage.... the better attorney representation you will get....because of the higher dollars the insurer is exposed to. IMO....that makes complete sense.


Gee, you mean to tell me that a lawyer gave you advice, which could potentially make him more money, out of the goodness of his heart? How noble of him, I bet he tells the same to all of his clients, not just his friends.

KrisZ;

It had nothing to do with him making more money....He didn't work for AllState....and this was just general advise on the amount of liberality coverage a person should have. ...His firm (of high end lawyers) were hired by AllState, especially when the dollar amounts of the insurer would be very high.

Just because he's a lawyer....is there anything about his advise that doesn't make sense? Or are you just to dense to understand it?

 

[dparm]

It's a valid point. More coverage = you can afford a better lawyer.

 

[KrisZ]

But that's my point, it's lawyers and law firms that created this problem to begin with, so now people are told to pay for more coverage in order to be better represented. This drives the premiums up. It's a vicious cycle where the more coverage people have, the more lawyers can sue for, so then people buy even more coverage to stay "protected".

The same goes for real estate agents upselling houses or creating bidding wars, or doctors that are in bed with pharmaceutical companies.

But then, perhaps I am "too dense" to get it.

 

[Oregoonian]

KrisZ: Yeah....you are!

For example; If you were accused of murder....the stakes are very high.....and all things being equal.....would you hire a inexperienced attorney....or an expensive experienced attorney who's chances of getting you off are better (if you could afford to do so)....?

When the dollar stakes are high because the auto insurance company might be liable for hundreds of thousands of dollars....they are going to use the 'best' attorneys possible to represent them (and you). You get what you pay for (as the old saying goes). It only makes sense to do that.

This is why you insure yourself for higher amounts, so to protect your assets (and get better representation if needed) ....and why its a prudent thing to do.

But KrisZ.....if your situation is such where you have very little assets....then just insure yourself at the minimum levels (and get the representation you paid for).....but start living in the real world and stop blaming the 'system' for your woes.

BTW....as a retired real estate agent....I won't go into the RE issues of up=selling (which you brought up)....and which you know absolutely know nothing about.

 

[hattaresguy]

I have $1m, probably will increase it next year.

The liability is crazy these days, who cares about the car worst case you smash up a $30k or maybe a $50k rig, chances of hitting something more valuable are slim.

Its the medical that gets you, real or imagined.

 

[JHZR2]

I hate that the minimums are so low given that the cost of repairs or injury are so high.

That said, to some extent, you protect against what you have to loose, and some of that has to do also with your family situation. For example if married with kids, depending upon where you live, someone injured by you couldnt sue and take the home that your wife and kids live in (assuming it is in her name too).

So if you dont have many assets to your name, you might have less. You would also need to check on if retirement and other assets are fair game.

At as low a coverage level as you could, Id just get into an umbrella which should be more cost effective and wide-covering.

 

[Duffman77]

Originally Posted By: KrisZ
But that's my point, it's lawyers and law firms that created this problem to begin with, so now people are told to pay for more coverage in order to be better represented. This drives the premiums up. It's a vicious cycle where the more coverage people have, the more lawyers can sue for, so then people buy even more coverage to stay "protected".

The same goes for real estate agents upselling houses or creating bidding wars, or doctors that are in bed with pharmaceutical companies.

But then, perhaps I am "too dense" to get it.


I will start off saying that I am no fan of Insurance but it definately has its place.

The insurance industry has better knowledge than any other identity on the planet as to what their risks are with respect to losing and what the awards will and what the costs are to fight a lawsuit.

Despite all the warm and fuzzy commercials on TV, your insurer is not your friend, if you carry the bare minimum and you have a claim that will near or exceed your coverage, your insurer will treat your claim like a business decision and they wont think twice about handing over what they are contractually obligated if they dont feel it is worthwhile for them to fight and leave you fight the battles.

 

[JHZR2]

Originally Posted By: Duffman77


Despite all the warm and fuzzy commercials on TV, your insurer is not your friend, if you carry the bare minimum and you have a claim that will near or exceed your coverage, your insurer will treat your claim like a business decision and they wont think twice about handing over what they are contractually obligated if they dont feel it is worthwhile for them to fight and leave you fight the battles.


Not in my experience. They represented their minimally insured person when the claims went over their level and just turned it into a legal bleeding match which made it more expensive and more of a hassle for everyone. Apparently they had an obligation to do this, at least in PA.

 

[lexus114]

1-800-safe-auto.....

 

[rjundi]

If you have assets and/or are a high income earner I would consider extra liability.

The chances are low you will use insurance at the upper limits but if you do an opposing side will look at all potential avenues for a settlement weighing it against the ability to collect in a reasonable time.