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
Property damage may be expensive, but it pales in comparison to the price you might have to pay if someone is injured or killed in an accident for which you are at-fault. Wisconsin requires all drivers, including those here in the Mayville and West Bend areas, to carry a minimum amount of bodily injury liability protection, but we almost always recommend purchasing more than is required. Injury-related expenses can total hundreds of thousands of dollars or more for medical bills, lost wages, rehabilitation, and emotional distress. You could also be charged punitive damages for your negligence, especially if you were texting or intoxicated while driving. If your car insurance comes up short of your liability, you could be personally responsible for any excess damages.
How Much Do You Have to Lose?
Maybe you do not get behind the wheel after drinking. Perhaps you would never dream of texting and driving at the same time. Even still, all it takes is one unexpected tire blowout or some bad weather to put you in a situation where you are fully or partially at-fault for an accident. If you are sued for liability that exceeds the limits on your bodily injury liability coverage, how would you pay the debt? Would you have to dip into savings, sell your boat, or perhaps make years of future payments from your income? Do you have an inheritance that could be at risk? Knowing how much you stand to lose can make it easy to choose high limits for your liability coverage.
Split vs. Combined Single Limit Coverage
When you choose your coverage amount, your insurer may offer you split limits or a combined single limit (CSL). A split limit may be listed as two different numbers, such as 25/50 or 250/500. The first number represents the amount in thousands that the insurance policy will pay for an individual victim’s injuries. The second number is the total amount in thousands available for all combined bodily injury liability payments after an accident. A combined single limit is different in that it does not impose individual victim coverage limitations. In other words, a 300 CSL would provide up to $300,000 total for all bodily injury liability after an accident.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
Just as you depend on your liability insurance to protect you against financial liability, you also depend on other drivers to carry enough liability to cover your losses in the event an at-fault driver injures you. Unfortunately, many drivers are either uninsured or otherwise do not carry enough coverage to take care of your needs after an accident. One of the most important things you can do is have uninsured motorist (UI) and underinsured motorist (UIM) protections on your car insurance policy. These two coverage types assure that you and your passengers are covered against the negligence of others.
Money to Help with the Smaller Things
If you have ever paid to rent a car or have your vehicle towed after an accident, you know how quickly these expenses can add up. Fortunately, you can personalize your insurance policy to include coverage for towing and rental car reimbursement. You can even include medical payments protection, which helps cover the cost of medical deductibles, co-pays, and out-of-pocket medical expenses after a car accident, regardless of who is at-fault.
Beyond Car Insurance
Few things are scarier than being sued for millions of dollars. Even if you do not have cash-on-hand, you could still face wage garnishment and asset liquidation if you lose your defense. In these types of extreme scenarios, having an umbrella policy to supplement your primary car insurance liability can shield you against financial ruin. Umbrella policies pay for excess liability that exceeds the limits of your primary coverage. They are affordable and usually come with coverage limits of $1 million, with additional coverage available to those with high-risk vulnerability. Contact our team here at Mayville Insurance for help determining if an umbrella policy may be right for you.