Car insurance may seem like an expensive unnecessary nuisance, but it’s worth its weight in gold if you’re in an accident. That’s assuming that motor vehicle owners have enough insurance. If motorists can afford it, it’s wise to buy more insurance than the state minimum coverage levels.
Here’s why: Automobile accidents are expensive in terms of damage to property and, especially, to people. State minimum insurance limits are typically low, with most states requiring liability coverage of $25,000 for one person injured in an accident, $50,000 for all people in the accident and $10,000 for property damage to the other car. Additionally, most states do not require vehicle owners to carry Personal Injury Protection, known as PIP, or under/uninsured motorists (UM/UIM) coverage. But this coverage is handy to have when there’s an accident.
It’s a good idea to have coverage beyond the minimum coverage levels because some states allow injured people to go after the at-fault driver’s assets if there is insufficient insurance or none at all.
Because limits in most states are so low, some car insurance companies may require coverage beyond minimum coverage levels. In Washington State, one major insurance company will not write policies for 25/50/10. Instead, they insist on 50/100/25 and recommend 100/300/50 for homeowners. The company also insists on $35,000 in PIP coverage.
New car owners know that $10,000 isn’t enough to pay for their car if it’s been totaled in an accident. Yet, if that’s all the coverage the at-fault driver has, that’s all they’ll get unless they have UM/UIM or gap coverage which is sometimes required by lenders financing new cars.
Since most states don’t require PIP coverage, many vehicle owners won’t buy it because of the cost. They think their health insurance will cover their medical expenses if they’re in an accident. They don’t stop to think they’ll have to make co-pays with health insurance. Health insurance also doesn’t pay for days missed from work or someone to come cut the grass, but PIP does. They also may not stop to think about who is going to pay for the passengers who don’t have PIP or health insurance.
PIP limits as low as $10,000 are inadequate with medical costs rising so dramatically these days. An ambulance ride from the accident scene to the hospital could cost $1,000, and the initial emergency room visit could run into the thousands. Your PIP limits could be exhausted before you’ve checked out of the hospital. Who pays for the rest of the treatment?
These are just some of the reasons why it’s important to have car insurance that extends beyond what a state’s minimum coverage levels are. Expensive? Perhaps, but worth it in the long run.
