Should I Only Carry State Minimum Coverage?
Most states require vehicle owners to carry a minimum amount of car insurance or face high penalties and possible jail sentences. Also, an owner can't register their vehicle without showing proof of insurance.
Because of this, most reputable insurers put together packages made to abide by the owner's home states laws, and these packages can be very affordable. Although these prices that come with minimum coverage are tempting, is this coverage just a false sense of security that will not protect you in the long run? This article will go over the pros and cons of minimum state coverage.
Quick Survey of State Minimums
Illinois Requires
Missouri Requires
In 2010, according to the Center for Disease Control, an estimated 32,885 people died and over two million people were injured in auto accidents in the United States. Missed productivity and medical costs exceeded $99 billion. Only half of this was paid by private insurers and the other half was paid by government programs and some by charities. However, about 25% was paid by those involved in the accident meaning nearly $25 billion in medical bills comes out of pocket.
This means, if an owner carries the state minimum of $10,000 personal injury in Florida and injures someone in a car accident, they can be held legally liable for the balance of the medical bills. And an airlift to a trauma center can be $25,000 alone.
On top of medical bills, the individual at fault has to pay for car repairs. With vehicles becoming more state-of-the-art, the repairs become more expensive. When a well known automobile association accounted for vehicle repair costs, the CDC number jumped from $25 to $163 billion per year. With most states requiring only $10,000 in property damage coverage, an owner who opts for minimum coverage takes on the majority of these costs.
The Risk to Your Assets
The final consideration is insurance is meant to protect you and your assets. If a car owner insurance's limits do not cover the damages, the car owner may find him or herself in court. Jury verdict research has found that damage awards for auto accident cases involving serious back injuries, as an example, range from $50,000 to over $400,000. The low end of $50,000 could wipe out a person's entire retirement fund. A lower-income owner with no tangible assets could have his or her wages garnished to pay off a jury award maybe even putting the insurance policy owner in debt.
Owning only state minimum insurance coverage may be a recipe for disaster for both the party at fault and the victim of the accident. Contact an experienced insurance agent who can help a vehicle owner balance the factors of risk aversion and asset protection against cost.
Because of this, most reputable insurers put together packages made to abide by the owner's home states laws, and these packages can be very affordable. Although these prices that come with minimum coverage are tempting, is this coverage just a false sense of security that will not protect you in the long run? This article will go over the pros and cons of minimum state coverage.
Quick Survey of State Minimums
Illinois Requires
- $20,000 - injury or death of one person in an accident
- $40,000 - injury or death of more than one person in an accident
- $15,000 - damage to property of another person
Missouri Requires
- $25,000 - per person for bodily injury
- $50,000 - per accident for bodily injury
- $10,000 - per accident for property
In 2010, according to the Center for Disease Control, an estimated 32,885 people died and over two million people were injured in auto accidents in the United States. Missed productivity and medical costs exceeded $99 billion. Only half of this was paid by private insurers and the other half was paid by government programs and some by charities. However, about 25% was paid by those involved in the accident meaning nearly $25 billion in medical bills comes out of pocket.
This means, if an owner carries the state minimum of $10,000 personal injury in Florida and injures someone in a car accident, they can be held legally liable for the balance of the medical bills. And an airlift to a trauma center can be $25,000 alone.
On top of medical bills, the individual at fault has to pay for car repairs. With vehicles becoming more state-of-the-art, the repairs become more expensive. When a well known automobile association accounted for vehicle repair costs, the CDC number jumped from $25 to $163 billion per year. With most states requiring only $10,000 in property damage coverage, an owner who opts for minimum coverage takes on the majority of these costs.
The Risk to Your Assets
The final consideration is insurance is meant to protect you and your assets. If a car owner insurance's limits do not cover the damages, the car owner may find him or herself in court. Jury verdict research has found that damage awards for auto accident cases involving serious back injuries, as an example, range from $50,000 to over $400,000. The low end of $50,000 could wipe out a person's entire retirement fund. A lower-income owner with no tangible assets could have his or her wages garnished to pay off a jury award maybe even putting the insurance policy owner in debt.
Owning only state minimum insurance coverage may be a recipe for disaster for both the party at fault and the victim of the accident. Contact an experienced insurance agent who can help a vehicle owner balance the factors of risk aversion and asset protection against cost.
