Why you should Buy Higher Auto Insurance Limits than your State’s Minimum Requirement

Why you should Buy Higher Auto Insurance Limits than your State’s Minimum Requirement

Buying auto insurance can be a confusing task to undertake for those unfamiliar with the insurance industry.  Many people choose the minimum liability limits required because it leads to the least amount of premium paid out.  However, I’m here to tell you why you should at least consider buying higher limits than you are legally required to purchase.  In Pennsylvania, the state that I am licensed to sell insurance, the minimum liability limits are ,000 for bodily injury per accident, ,000 for bodily injury aggregate per year, and ,000 for property damage.  This means that in the event of an at fault accident, the insured would only have up to ,000 to pay out for the pain & suffering, medical bills, and loss of income of the claimant.  If the insured was involved in two or even three accidents in the same year, he/she would only have up to ,000 to cover all of the expenses from all of the accidents. Finally, property damage would pay for the damage down to the vehicle that the insured hit, so only ,000 would be available for that under the minimum requirements.

These liability limits might be enough to cover a minor fender bender, but just think of what would happen if you had minimum liability limits and were involved in an accident with a lawyer who earned 0,000 per year and was driving a BMW at the time of the loss.  To make matters even worse, say the lawyer was injured to the extent of being in a coma for two months and his vehicle was completely totaled.  In this case, you would be responsible for the lawyer’s medical bills, loss of income, and lawsuits due to pain & suffering that he/she underwent as a result of the accident.  You would only have ,000 to cover all of these intangibles, which would likely add up to well over 0,000.  In addition, you would only have ,000 to cover his/her totaled BMW.

You might be wondering what happens after your liability limits are exhausted.  Well, when you have used all of your insurance, the claimant is allowed to sue you for all of your personal belongings and assets.  Therefore, you could potentially lose your house, car, stocks, jewelry, and expensive electronics if the claim is severe enough.  This is especially important if you have a lot of investments and spent a lot of money on your house, vehicles, etc.  You could lose everything if you don’t have enough insurance.

Although this may sound scary, the solution for not allowing this to happen to you is actually really easy.   All you need to do is buy more than the minimum requirements for your auto insurance.  I usually recommend limits of 100/300 for BI and 100 for PD at the very minimum.  If you currently have lower limits than this, I suggest you contact me to see how much more it would cost you to increase your limits (you will probably be surprised to find out it is not a whole lot more than what you are already paying).  If you really want to be fully covered, I suggest looking into purchasing a Personal Catastrophe Liability policy (a.k.a. umbrella policy), which will give you an extra million on top of what you already have on your regular auto policy.  Umbrella policies generally cost about 0 per year.  I know money is tight right now for everyone, but you never know what’s going to happen out on the roads. The price you will pay to increase your liability increase is much less than the price of potentially losing everything in your life because you wanted the minimum state requirements.

Please contact Jessie Balicki with Erie Insurance for your free auto quote today.

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