Is state minimum enough?

accidents-preventionsHave you ever thought about state minimum liability insurance limits and what they mean to you?

Dalton Insurance Agent, John Galloway recently had a client ask, “how much can I save by lowering the limits on my auto insurance?” John’s answer, “Unless you can guarantee you will not be involved in an accident, at fault or not, you’re gambling at best.”

You see, when you purchase liability insurance you are not insuring your car. You’re insuring yourself to cover damages you are liable for as well as protecting yourself from damages of another driver who fails to buy insurance or has too little insurance.

For starters let’s look at NC minimum liability coverage. We abbreviate the numbers as 30/60/25. The numbers represent $30,000 per person bodily injury / $60,000 per accident bodily injury / $25,000 property damage.

Let’s assume you carried NC minimum limits on your auto insurance policy. Heading to work one morning that puddle you crossed turned out to be ice that had frozen overnight. Your car slides on the ice and slams into the curb. Before you know it, you are on the sidewalk and skidding into a parking lot where some folks have just arrived for work.

A lady had just stepped out of her car when your car makes contact. The impact pushes her car against a truck parked beside her. She is pinned between the vehicles and is severely injured. Your car continues to slide and comes to a stop after colliding with another vehicle.

A simple accident on your way to work can have major consequences. The lady who was getting out of her car suffered significant injuries but survived. Her total medical bills are $126,346.54. Damage to her car was a total loss at $23,698.00. The other vehicle was repairable at a cost of $5,560.

Let’s look at who is going to pay for your accident. No worries. You’re insured. Right?

Your insurance company sold you a policy and agreed to insure you. Now they are on the hook to protect you… up to the limits of liability.

Your insurance company, in this case will pay out exactly $30,000 toward the bodily injury portion of the accident. They will pay out $25,000 of the property damage claims.

This leaves $96,346.54 of unpaid medical expenses for the unfortunate victim and $4,258 of unpaid property damage claims.

Have you ever wondered what happens to these additional liabilities that were not insured? If not you should. Although your insurance company has refused to pay the majority of damages, they have done everything they were obligated to do according to your policy.

Unfortunately you are liable for any remaining balance not covered by your insurance. If you do not have the financial means to cover the bills yourself you may lose any assets you own to pay the debt including your home!

As you can see, a single unfortunate event can ruin your financial future. It is so easy to shop insurance based on price. That’s ok ONLY if you’re shopping for the level of coverage that you need. You should never compromise coverage to save a few dollars in premium. Remember, liability insurance protects YOU.

Accidents happen. They shouldn’t ruin your life. Give us a call or stop by today to let us evaluate your current coverage. Dalton Insurance Agency of the Carolinas is an Independent Insurance Agency and will shop multiple top-rated insurance providers to secure for you the best coverage at the lowest price.

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