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 liability is not the only damages you may be responsible for after an accident. If there are other people involved in the collision – whether motorists, cyclists, or pedestrians – you could be financially responsible for their injuries. There are medical bills to pay, and you could be sued for the victim’s lost wages and emotional distress. Furthermore, you could face additional financial burdens if a jury places punitive damages on you; this can occur anytime a person is at fault for a collision – particularly if there was negligence demonstrated behind the wheel.
Bodily injury liability insurance is designed to protect you against the financial consequences of injuring another person from behind the wheel. It can pay for lawsuit settlements and court judgments, helping to keep your income and assets intact. Here in Wisconsin, all drivers are required to carry a minimum amount of bodily injury liability protection, but we here at Van De Hey Insurance recommend much higher limits. If you are underinsured, you could become personally responsible for paying any damages that exceed your liability limits. Why put your savings and financial future at risk when higher bodily injury liability limits can minimize your vulnerability?
Split Limits vs. Combined Single Limit (CSL)
The coverage limits you select will be listed on your insurance policy in one of two ways – as a split limit or combined single limit (CSL). A split limit includes two numbers, such as 25/50 or 250/500. The first is the maximum amount in thousands the insurer will pay toward the injury-related expenses of each victim in an accident. The second number is the amount in thousands the insurer will pay for the total bodily injury liability for all victims in an accident. A combined single limit does not restrict the amount of coverage available per individual but instead offers a flat amount of maximum available coverage per accident.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
If another driver injures you, chances are their car insurance will cover your medical bills. In some cases, however, at-fault drivers are uninsured or underinsured, leaving you with uncompensated losses. Perhaps the most important coverage you can purchase for yourself and your passengers is uninsured motorist (UI) and underinsured motorist (UIM) insurance. The first covers you and your passengers if an uninsured driver injures you. The second takes care of unpaid damages more than the liability limits on an at-fault driver’s policy.
Money to Help with the Smaller Things
Besides the cost of property damages and injuries, how much can a car accident cost? There are several ‘small’ expenses that can add up to a major financial burden if you are not covered for them. Here at Van De Hey Insurance, we build personalized car insurance policies to cover everything from towing charges to rental cars. We can even include medical payments coverage that helps pay for out-of-pocket medical expenses, such as your deductible and copay, regardless of who is at-fault for an accident.
Beyond Car Insurance
Some accidents result in more serious liability than others. If you permanently disable a physician just starting out in his career, you could face millions of dollars in compensatory damages for lost future wages. In these cases, even the maximum liability coverage can only cover a fraction of the damages, leaving you with a devastating financial responsibility. In these cases, umbrella insurance can help protect you against financial ruin by supplementing your primary liability coverage. Most umbrella policies are very affordable and provide $1 million or more in additional coverage. We recommend all drivers at least consider adding this type of coverage to their insurance portfolios.
