Every driver should ask themself: Do I have enough bodily injury protection? Just as every person is unique, so is your insurance needs. In this blog, we will break down the most important factors you need to consider when selecting how much insurance coverage is right for you.
What Factors Should I Consider?
When determining how much auto insurance coverage is right for you, there are several factors you should consider:
- Assets – If you cause an accident, did you know you can be sued for damages beyond your Bodily Injury and Property Damage limit? Consider things like home equity, savings, and investments as potential targets in a lawsuit.
- Income – Your future earnings could also be at risk in the event of a lawsuit.
- State Minimum Requirements – Every state has minimum liability requirements. In Kentucky, the minimum is (25/50) which means $25,000 in liability protection per person, up to a maximum of $50,000 per accident.
- Often times, state minimum coverage is enough to ensure you can legally operate the vehicle on public roads, but is not enough to properly protect you in the event of an accident.
What Can a Bodily Injury Lawsuit Cost?
You are driving down the road and out of nowhere BOOM! You’re involved in an accident with another vehicle. This is a scary situation for anyone. It gets more concerning when you learn how costly the typical bodily injury lawsuit becomes. According to Tario & Associates:
- Moderate injuries such as broken bones can cause $10,000-$50,000 in medical bills
- Severe injuries such as traumatic brain injuries or internal damage often range from $50,000-$100,000+ in medical bills
- Catastrophic injuries such as permanent disability or long-term hospitalization range from $250,000-Several Million Dollars in medical bills over the course of a lifetime
Do I Have Sufficient Bodily Injury Coverage?
The best way to answer this question is looking into your personal financial situation and asking these questions:
- What is my net worth? Your liability protection should match or exceed this number to avoid potential seizure of assets in the event of a lawsuit due to an accident you cause.
- If you have a net worth of $250,000, as a general rule, 100/300 Bodily Injury limits would be a good amount of protection.
- 100/300 means your insurance would pay $100,000 per person, up to a maximum of $300,000 in bodily injury damages for the entire accident.
- Increasing your Bodily Injury limits to 250/500 and adding a $1,000,000 umbrella policy would provide even greater peace of mind for an affordable price.
- Do you currently have state minimum coverage? If you have a job, own a vehicle or property, or have any savings, there is a good chance you do not have sufficient coverage in the event you are At Fault in a serious accident.
- We recommend reaching out to your agent to discuss increasing your Bodily Injury limits for added protection.
- The price to double your Bodily Injury protection from 25/50 to 50/100 is usually minimal and provides significantly more protection.
- Do you own a business? Do you own a home? Do you have assets saved in a Savings or Brokerage account? If you answered yes to any of these questions, anything below 100/300 is probably not enough.
How Do I Increase My Bodily Injury Protection?
- The first line of defense is increasing your current Bodily Injury limits on your auto insurance policy. This is an easy, affordable option to increase your protection in the event of an At Fault accident.
- The price to double your Bodily Injury protection is much more affordable than you might think.
- Add an Umbrella policy to supplement your underlying Auto and Home liability protection.
- Once you have sufficient Bodily Injury limit protection (usually 250/500 but could be as low as 100/300 depending on the carrier), you can add an Umbrella policy for additional security.
- The Umbrella policy would provide an additional layer of protection in the event your underlying auto or home liability limits are exhausted.
- Umbrella policies start at $1,000,000 in additional protection and usually increase in million dollar increments.
- The price for an umbrella policy varies based on your unique situation but a good rule of thumb is prices typically range from $150-$450 annually.
What Should I Do Next?
Have you purchased a new car, moved to a new home, started a new job, or had a child recently? When is the last time you have discussed your Bodily Injury limits with your agent? Your life is constantly changing, and so are your insurance needs. Finding an agent who is willing to take the time to learn about your unique situation can make all the difference. This attention to detail is what we pride ourself on at Aspen Ridge Insurance. Learn more about what makes us different here.
Free, No Obligation Review
Reach out today to discuss your unique situation. We take the time to get to know you, and offer tailored advice to ensure you are properly protected.
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