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
Drivers responsible for a car accident are not only responsible for the property damages they cause, but also for victims’ injuries. As a driver in Minnesota, you need bodily injury liability coverage to protect your income and assets against expensive lawsuits that could otherwise threaten your financial security. The law requires all drivers to carry the state-required minimum bodily injury coverage, but we here at Patriot Insurance recommend much higher limits. If your bodily injury liability limits are too low to cover your financial responsibility, your personal assets and income may become vulnerable to liquidation or garnishment.
Drivers who drink and drive, text behind the wheel, or show negligence when driving could face both compensatory and punitive damages. However, even the safest drivers may find themselves responsible for an accident. You could hydroplane during a storm, skid on black ice, blow a tire on the Interstate, or simply be in the wrong place at the wrong time. It does not matter how it happens; it only matters that it did happen and you are totally or partially at-fault.
Split Limits vs. Combined Single Limit (CSL)
When you select your bodily injury liability limits, your insurer may offer you a combined single limit (CSL) or split limits. A combined single limit is a maximum amount in thousands that the insurance company will pay toward to the total bodily injury liability damages after an accident. A 300 CSL, for example, pays up to $300,000 total damages with no individual claims limit.
Split limits pay a maximum total amount per accident, as well as a maximum amount per individual victim; this may appear on your policy as two separate numbers, such as 250/500. In this case, the first number indicates the insurance company will pay as much as $250,000 per individual injured in an accident, but no more than $500,000 in total damages for all injured parties combined.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
As a policy-holder, you and your passengers’ safety are of utmost importance to us here at Patriot Insurance. One of the most important steps you can take to protect yourself and your passengers is to purchase uninsured (UI) and underinsured motorist (UIM) protection. UI helps cover your injuries if an uninsured driver hits you. UIM helps fill in gaps left behind by drivers with too little bodily injury liability coverage.
As a resident of Minnesota, you also benefit from the addition of personal injury protection, or PIP. This mandatory insurance serves as the primary coverage for you and your passengers’ injuries regardless of fault in an accident.
Money to Help with the Little Things
Small expenses can quickly eat into your budget after an accident – particularly if your car is towed or you need to rent a car while your vehicle is being repaired. At Patriot Insurance, we offer a wide range of extra coverage types to enhance your car insurance policy and personalize it to meet your needs. Talk to one of our helpful team members to find out how additional coverage could minimize your financial burden and save you hundreds or even thousands after a collision or other covered event.
Beyond Car Insurance
Finally, we recommend considering the addition of supplemental liability insurance to help cover any excess that may exceed the limits of your primary coverage. In extreme cases, bodily injury and property damage claims can soar far beyond the maximum available coverage on your car insurance policy. If you hit a young doctor, for example, you could have to pay hundreds of thousands of dollars in medical bills, as well as a few million in lost future wages.
Umbrella insurance is a separate policy that works in tandem with your primary coverage. Once you exhaust the limits on your primary coverage, umbrella insurance picks up the excess with additional limits of $1 million or more. Considering its affordability and the financial hardship it could spare you and your family, we recommend contacting our office to find out if umbrella insurance could be right for you.