Is the State Minimum on Car Insurance Adequate?

By TE Cunningham

Car insurance minimums are set by the state in which you live. You can find them on your state’s insurance commissioners’ website. (Kansas here)

Driving without insurance is not legal in most states. As such, it’s important to know what you need to do to be legal and then what you need to do additionally to be safe – both in health and in liability exposure.

Typically, there are four types of basic coverage:

  • Bodily injury liability
  • Property damage liability
  • Personal injury protection
  • Uninsured/underinsured motorist protection

Bodily injury liability is required so that if you are the cause of a car accident and a person is injured, it will assist in paying for the medical expenses including lost income resulting from the injuries associated with the accident.

Property damage liability helps pay to repair damage to another person’s automobile if the damage was your fault; it doesn’t cover your auto.

Personal Injury Protection which is sometimes referred to as PIP or no-fault insurance. This coverage may include medical expenses, lost wages, etc. which result from the accident.

Uninsured/Underinsured Motorist Protection. Uninsured motorist coverage protects you if you’re in an accident with an at-fault driver who does not have liability insurance. Underinsured motorist coverage protects you when you’re in an accident with an at-fault driver whose liability limits are not sufficient to cover vehicle damage or medical fees.

Many states only require bodily injury liability and property damage liability.

Other helpful terms to know are:

  • Collision coverage is for the repair of your car in the event of a collision or rollover
  • Comprehensive coverage aids if there is damage to your auto resulting from weather-related factors or vandalism

Agent Jessi Boles states, “An easy way to remember the difference in Collision and Comprehensive coverage is Collision encompasses things you can avoid and Comprehensive includes things you can’t avoid, such as hail. These are where your deductibles come into play which is the amount required of you out of pocket to fix the vehicle before insurance pays.”

So now you may be asking yourself – is the minimum enough in terms of coverage? It’s a question to spend some time on with your insurance agent. The answer mostly lies in your appetite for risk.  Less insurance means more risk; more insurance means a larger investment to reduce risk, which could be as large as being involved in a lawsuit in which you are sued for substantial damages.

If you don’t have the cash to pay for a lawyer and possible settlement, you could even be looking at having your wages garnished. Is that worth the risk? Probably not.

There are better ways to save money on your auto insurance; ask your agent about all applicable discounts bundling, multi-car, good student, clean driving record and more.

“Increasing liability limits on your policy usually does not have a very large premium impact but can go a long way for peace of mind,” says Boles.

If you have not done so recently, it’s probably a good time to reach out to your agent, and make sure you and yours are adequately protected on the road of life.

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