How to Decide How Much Auto Insurance You Need

June 13, 2017

While the minimum limits may provide the cheapest rate in the short term, they don't provide ample protection for what you value most.

What to consider when choosing your limits:

• Medical bills add up.
  While $100,000 might sound like a lot, it doesn’t go very far if you’ve injured someone in an accident. Consider the costs of an ambulance ride, the hospital stay, necessary tests and recovery expenses. The rising cost of medical care means those limits will run out more quickly.

• Cover the unexpected.
  In 2014, there were 6.1 million police-reported crashes*, and every one of those people probably thought it would never happen to them. Out of those 6.1 million, 2.3 million people* were injured as a result. The annual cost of medical care and productivity losses related to motor vehicle crashes added up to more than $80 billion**.

• Protect your future.
  Even if you don’t own a home or a nice car, you still need adequate protection. When your limits run out, you’re still expected to pay what’s owed. If there are no assets to take that from, it will come out of current and future income until the debt is paid. Some states are allowed to take 25% of a person’s income if necessary.

• The price difference is minimal.
  Just because you’re tripling your liability limits doesn’t mean you’re tripling your rate. In actuality, it may only be a $50 difference. Considering that means adequately protecting your family, your home and your future income, that’s not much extra.

Real Safeco^® claims examples

1. Customer thought he was in drive, but was in reverse and ran into his friend as he moved his vehicle. His friend sustained a serious fracture to her leg, requiring surgery. Her hospital stay, surgery and all treatment resulted in over $135,000 inmedical expenses. Our customer's limits were $100,000, leaving him with a potential of over $35,000 in out-of-pocket expenses.

2. Customer struck a 53-year-old pedestrian. The pedestrian was taken straight to the hospital with multiple breaks and fractures and a bruised intestine. He spent multiple weeks in the hospital, including emergency surgery, a chemically induced coma and now has multiple plates and rods supporting his limbs. He’s also struggling with memory. His medical bills have totaled $408,000 so far, not including recovery time. Our customer's limits were $100,000, leaving him with a potential of hundreds of thousands in out-of-pocket expenses.

If these customers had higher limits and a Safeco Umbrella policy, they wouldn’t have been left with these massive out-of-pocket expenses.

© 2016 Liberty Mutual Insurance

Sources: *U.S. Department of Transportation, NationalHighway Traffic Safety Administration: 2014 Crash Data Key Findings **Centers for Disease Control, InjuryPrevention & Control: Data & Statistics

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