This post is part two of the blog post that answers the question “How much car insurance is enough?”
Compensation for Harm You Cause Others
You never want to consider the possibility of hurting someone while driving, but accidents happen. When people are injured, bodily injury liability helps to cover the financial responsibility of an at-fault driver up to the limits of his or her policy. It is not unheard of for a jury to award a victim hundreds of thousands of dollars, especially when the damages include expensive medical bills, emotional distress, lost wages, and future healthcare needs.
As a driver, you can be held responsible for any excess liability that remains after your insurance limits have been exceeded. Unless you have the cash on hand to cover the debt, you could be forced to liquidate your savings and assets, or perhaps even make payments to the victims from your future income. That is why having the right liability limits could mean the difference between peace of mind and financial ruin.
How Much Bodily Injury Liability Coverage Should You Choose?
Insurance companies provide bodily injury liability coverage in either split limits or combined single limits. Split limits, which may be expressed as two numbers separated by a forward-slash, typically represent the amount of money the insurer is willing to pay for injuries to each victim, as well as to all victims combined in an accident. In other words, a 250/500 split means the insurer will pay up to $250,000 per victim with a maximum of $500,000 in total bodily injury payments for the entire accident. A combined single limit is a little more straightforward, eliminating the individual victim coverage cap and instead offering a single maximum coverage limit for each accident.
Here in Wisconsin, you have the power to choose your bodily injury liability limits so long as they comply with state minimum insurance requirements. However, we recommend far more than the minimum coverage to protect your income and assets against devastating lawsuits. For more information or help choosing your liability limits, contact our office today.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
Here in The Chippewa Valley, drivers know they are required to be insured to operate a motor vehicle. Unfortunately, many do not purchase enough liability coverage for their policies, and some choose not to comply with mandatory insurance laws at all. If you are injured by an uninsured or underinsured driver, make sure you can rely on your insurance to cover you and your passengers. Uninsured motorist (UI) and underinsured motorist (UIM) are perhaps two of the most important types of protection on your policy, as they ensure you and the people who ride with you are financially protected against the negligence of others.
Money to Help with the Smaller Things
After an accident, you could spend $300 on towing charges, another $500 on a rental car, and $2,000 for you medical deductible and co-pays, or you can rely on your car insurance to cover your costs. Often, it is the small things that add up to major expenses. Adding coverage for towing, rental car reimbursement, and medical payments can keep you moving forward after an accident without any financial hiccups.
Beyond Car Insurance
While we here at Killey Insurance can build you a strong and reliable car insurance policy, there are some things that car insurance comes up short on. For those cases, supplemental liability in the form of an umbrella policy can bridge the gap between your primary insurance limits and your actual financial responsibility. For example, your high-limit $500,000 bodily injury liability limit would only cover half of a million-dollar judgment against you. Instead of leaving your income and assets at risk, we urge you to consider an affordable umbrella policy, which can extend your liability protection by as much as $1 million or more.