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
Approximately 2.5 million people visit emergency departments due to collision-related injuries every year. Hundreds of thousands require time off work to heal and recovery as they remain hospitalized after the accident. It does not matter how an accident happens or whether you are fully or partially at-fault. If you cause an accident, you could be responsible for paying victims’ medical bills and other injury-related costs. If you exhibited negligence at the time of the accident, such as texting while driving, you could also face punitive damages.
Missouri drivers must carry bodily injury liability insurance to help cover the cost of injury-related expenses, but the minimum limits required by the state are too low to provide adequate coverage for the cost of medical bills, emotional distress, lost wages, and other costs. At Mid-Rivers Insurance, we recommend purchasing high-limit bodily injury liability coverage that will better protect your income and assets. Without it, you are vulnerable to lawsuits and any damages that exceed the limits on your insurance policy.
Split Limits vs. Combined Single Limit (CSL)
When you select your bodily injury liability limits, your coverage may be offered as either a combined single limit or a split limit. A combined single limit, or CSL, covers up to a maximum value in thousands per accident for all victims combined without individual caps on coverage. If your policy shows a 300 CSL, for example, your insurance will pay up to $300,000 toward the cost of all bodily injury claims regardless of how many victims are injured.
A split limit features two different numbers on your policy and is more restrictive in how funds are allocated to victims. The first of the two numbers indicates the amount in thousands the insurer will pay per injured individual, and the second number is the maximum total amount the insurer will pay for all individual claims combined. A 250/500 split, for example, pays up to $250,000 per person and up to $500,000 total bodily injury liability per accident.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
If you are the one injured in a car accident, it helps to know the at-fault driver’s insurance will cover your medical bills and other injury-related losses; but what happens if an uninsured driver injures you? One of the most important coverage types you can include in your policy is uninsured motorist (UI), which protects you and your passengers if an uninsured driver hits you. We also recommend underinsured motorist coverage (UIM), which helps pay for injury-related expenses that exceed the limits of the at-fault driver’s insurance.
Money to Help with the Little Things
It’s not just physical damages and liability; several ‘small’ expenses can drain your budget after an accident, too. You might have to pay hundreds for towing charges and hundreds more to rent a car while your vehicle is repaired. You may need to pay co-pays for chiropractic visits or a health insurance deductible for your hospital stay. Instead of paying out-of-pocket, you could rely on your car insurance to cover the bills instead. At Mid-Rivers Insurance, we can help you build and personalize your policy to include coverage for medical payments, towing, rental car reimbursement, and more.
Beyond Car Insurance
Even a well-constructed car insurance policy with high coverage limits can fall short of meeting your needs after an accident. In extreme cases, liability claims can quickly get out of hand, resulting in hundreds of thousands or even millions of dollars in damages. Whether you cause an accident that severely injures multiple people or you happen to injure a young doctor who will be forced into an early retirement, even high-limits on your standard liability insurance cannot cover a seven-figure lawsuit.
Instead of risking your income and assets to a major claim, consider purchasing an umbrella policy to help supplement your coverage. Umbrella insurance is high-limit liability insurance that is secondary to the primary coverage on your car insurance policy. It pays benefits once you exhaust the limits on your primary coverage, usually with additional coverage of $1 million or more.
For more information about umbrella insurance or any of the other coverage types listed in this post, contact our office today.