How much car insurance is enough? That’s the question when you’re looking for auto insurance – particularly if you’re searching for auto insurance that won’t empty your bank account. Plenty of people assume that if they have enough insurance to legally get on the road, they’re good to go. Having insurance is required to be able to operate a vehicle on the road and each state has its own minimum limits for car insurance (the minimum limit meaning the smallest amount of insurance you can have to legally drive a vehicle.) But are those minimum levels really enough to protect you if you have a serious accident? Let’s discuss.
What do the minimum limits of car insurance cover?
In most states, the minimum limit only covers bodily injury liability and property damage liability. Liability coverage takes care of your legal responsibility to someone else if you physically injure them in a car accident or damage their property in an accident. So, the other driver and their car? Covered. Damage to you and your car? Not so much.
Like we mentioned above, each state has its own minimum limits of coverage for auto insurance. For example, Georgia’s minimum limit is $25,000 per person and $50,000 per occurrence of bodily injury liability and $25,000 of property damage liability. That might seem like a lot, but the costs of medical bills and so on can escalate very quickly.
Why aren’t the minimum limits of coverage enough?
Oftentimes the minimum limits aren’t enough because if you’re in a serious accident, those limits could quickly be blown out of the water. And if your insurance isn’t enough to cover the damages, the injured party could go after your assets if you’re unable to pay the expenses out of pocket. Imagine you hit a car and total it. What would happen if the car itself was worth more than the $25,000 limit of property damage liability you have?
If you want your insurance to take care of all the expenses resulting from an accident, you’re going to want to raise those limits of coverage.
And note that there’s nothing in those limits that covers the cost of having your vehicle repaired if you’re at-fault in an accident – you’d need collision coverage for that. Or what if a tree falls onto your car and squishes it like a pancake? What if your car gets broken into or stolen? It could happen. And for those scenarios, you’d need comprehensive insurance, which helps cover non-accident-related losses like fire, theft, vandalism, and animal strikes. Collision and comprehensive coverage have to be added to your auto policy.
So as you can see, having the minimum limits comes with a lot of risk to your financial situation. Yes, admittedly the premiums are lower, but is it really worth it?
How much will it cost to get higher levels of coverage?
Usually, it doesn’t end up costing that much more per month to get higher limits of coverage. You would have to look into getting some quotes or speak with your agent to find out exactly what price you’d be looking at.
So, hopefully we’ve given you some food for thought when it comes to your auto insurance limits. Though it may be tempting to choose the lowest available premium, the potential consequences of having low limits of coverage are kind of scary. But before you hit the road, make sure you’ve got enough insurance to protect yourself and your financial assets. The additional cost to your premium may end up being well worth it someday, though of course we hope you’ll never be in a serious accident.
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