I recently introduced a comparative rater (quote your own insurance) on our web site.
Since the launch we have had prospective customers in Bellevue Ky as well as Ft. Thomas and Newport, use the site to get
auto and home rate quotes from many of our affiliate companies. On the
auto quotes, I have been relatively surprised at the range and variety
of limits requested. Unfortunately I have discovered that most guests
have a rather vague understanding of which limits are most appropriate
for their life, or more specifically, financial circumstances.
I
can certainly understand why folks are confused; what with the never
ending myriad of ads on TV, the radio, in the mail - I saw an auto
insurance ad in the john the other night! How can one make sense of all
the noise? “Do I choose state minimum limits & save on premium?”
“Is it worth buying some extra liability coverage or is that just
throwing money in the – john?”
To begin,
let’s start with the basics. Car Insurance liability limits are
expressed as follows: ##/##/## or "Bodily Injury per Person "/" Bodily
Injury per Accident" / "Property Damage (i.e. the other driver's car)".
You’ll typically see companies or agents offering policies with limits
“$25/50/25”, “$100/300/100”, etc. For readability purposes, the limits
are represented in thousands. Therefore, in the latter of these
examples, each individual you injure is owed up to $100,000 for medical
expenses and the like; up to $300,000 per accident. Any property damaged is repairable up to $100,000.
Now
to the important question; how much insurance is appropriate for me?
Well let’s consider Ohio’s state minimum auto limits:
$12,500/$25,000/$7,500. Are you comfortable with $12,500 per injured
person? The following tidbit might help clarify the situation.
According to the Agency for Healthcare Research and Quality (AHRQ), “the
average price for an uninsured hospital stay in 2006 was $19,400.” As
such, $12,500 isn’t exactly a windfall for an auto accident victim.
For a few extra bucks a month, I would posit $100/$300/$100 makes much better financial and moral
sense. Also important to note, if someone is injured and the driver
carries inadequate or no liability insurance, the injured party has
every right to sue for recompense. If this were to occur, a judge would
dictate adequate conciliatory arrangements which could include the
withholding of future earnings or the seizure of assets. So, are
minimum limits really worth it? If funds are super tight, maybe one or
two fewer lattes a months would be a wiser sacrifice.
As an agent, I strongly encourage my insureds to secure, at a minimum,
limits of $100/300/100. Again, for a few extra bucks a month, it's
certainly worth it. In fact - and here's a kicker - some of our
companies occasionally offer higher limits for less premium
(depending on demographics and driving history). Yes, you could pay
less for a $250/500/250 policy than you will for a $100/300/100 policy!
Well
I hope I have clarified some of the confusion surrounding auto
insurance & auto insurance limits. Also, getting a quote online or
"kickin' the tires" is certainly an understandable exercise! I would
give it a shot myself. But I would certainly recommend talking with a
licensed agent before pulling the trigger on a policy. Better safe than
sorry!
Happy Driving!
