How much auto insurance coverage do I really need?
Question:
- 2003 Cadillac Escalade EXT
- Married couple: Wife 27 & Husband 23
- No major tickets in the past 3 years. Husband had one fix-it ticket almost 3 years ago
- Renters not home owners
- No big ticket assets
- No kids
Answer:
Everyone has given you great advice I will only add that after all considerations if you are able to afford the higher limits buy them, you never have enough and you do need to protect future earnings along with any assets you may currently have
It really comes down to how much do you stand to lose. You listed that you do not own a home and have a small amount of assets, 50/100/50 is OK, I prefer 100/300/100 minimum, the cost difference is generally small, the biggest cost of auto insurance is the comp and collision coverage.
You only really need the amount of coverage used in the event of a claim. Considering we can never predict when a claim will occur and for how much, we must decide ahead of time what amount of coverage we are comfortable with. Not knowing very much about your situation, I would say that you have made a good decision in the amount of coverage you purchased. I know you are not property owners, but if you plan on purchasing a home soon, or if you are professionals with a good income that is growing, I would recommend your purchase 100/300/100 in coverage. If you make more than 100k and own a home I then would recommend an umbrella for 1 mill. Increasing the amount of liability coverage is usually inexpensive if the driving and claim records are good. Hope this helps.
The only good way to answer this is "you can never have high enough limits"...reason being is you don't know what can happen. As others have said the limits you have seem reasonable, but what if you hit three kids crossing the street?
The only thing you can do is figure out what you can afford to spend on insurance and buy appropriate limits. We don't sell anything less than $250,000/$500,000 liability limits for personal auto and $500,000 combined single limit for commercial auto. This way when someone gets into a $75,000 accident they aren't running to us wondering why we only "sold them" a $50,000 limit.
You forgot wages. Future wages can be attached. Kids CAN'T be attached.
You need to carry limits high enough to cover your assets, which include not only your home, but stock & savings accounts, etc, AND three years future wages.
So if one of you is a brain surgeon making $500,000 a year, you need $500,000 on the auto liabiltiy, and a $3,000,000 umbrella.
With no major assets, and not much in the bank/stock accounts, just add your salaries together, and project for the next three years. Round up to the nearest standard auto limit.
Good advice from everyone so far. I think the consensus is you should have at least 100/300 to cover you and preferable 250/500 to protect your assets should you cause and accident with serious injuries.
What I don't see anyone address and I think it equally, if not more important, is the level of uninsured/underinsured coverage (UM/UIM). This is coverage which would cover YOUR medical bills, wage loss, or other expenses due to injuries you incur in the event an uninsured or underinsured driver causes and accident and you're injured. An underinsured driver is one who has insurance but doesn't have high enough coverage to adequately compensate the other party or parties. I've handled injury claims for many yrs and $50,000 is a drop in the bucket. What if an accident left you unable to work for months or more and your medical bills were mounting? do yourself and your spouse a favor and get a minimum of 100/300 and seriously consider 250/500.any less and your gambling with your future. You may think you'll never need it and hopefully you won't but you'll have the peace of mind in case you do.
You really don't have much coverage at all!!
Listen to jcollins --- all the commercials you see about attorneys getting their clients money - that's YOUR money. The insurance co will pay up to their limits, of course, but a serious accident and you're at fault? That could literally bankrupt you, and someone else will be driving the Escalade you worked so hard to get away from an auction.
I would seriously consider raising your limits. The best thing to do is talk w/ a P&C professional about what your assets are, and how much you could lose if you hurt someone.
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