There is a television advertisement by a national insurance carrier that instructs people to obtain the state minimum auto insurance limits to save money.

Is that really the message an insurance company should be  sending?

At first glance - sure. Everyone wants to save money. But the ad and this type of business practice puts people at risk financially.

What this ad is referring to are the "bodily injury and property damage" limits. These two items pay to the "other" party for accidents/injuries you cause. In our area, minimum limits are as follows:

Bodily Injury $15,000 per person, $30,000 per occurrence (per accident).
Property Damage $10,000.

Bodily injury are injuries the other party incurs due to your negligence.
Property damage is the other vehicle (or any property you harm) that is damaged.

I doubt this insurance carrier fully explains to people that they will be personally at risk for injuries and claims they cause that are over and above these "minimum" limits.

Let's look at Property Damage first. If you hit another vehicle and are deemed to be responsible your insurance policy will pay up to ten grand. What if the other vehicle is a Lexus. There are plenty of those on the road.

That $30,000 Lexus owner will receive $10,000 from your insurance company who "saved you money".

If this Lexus owner (who let's say makes $70,000 per year) is hurt and needs ongoing care and cannot work due to injuries and claims "lost income", your policy will only pay up to $15,000 per person.

If this Lexus owner or their passengers are injured, you will be help personally responsible. What if there are severe injuries or a death that occurs?

This Lexus owner, and his passengers, will have a decision to make - to sue you or not.

If you have any assets whatsoever, that will be an easy decision. They will sue you.

If you work and make a income, they will likely sue to garnish a part of your income (maybe for the rest of your life).

I hope when you buy auto insurance you do not buy the state minimum. It's available and ultimately you make the decision to how best insure you and your family. But buying higher limits can help protect you from much greater losses - your assets and a portion of your current and future income.




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