Everybody hates paying for car insurance, but they love it when they are involved in an accident and need it. Suddenly, injured victims have expenses that they have no way of covering. They can’t work, they can’t walk, and they can’t get their car repaired. Or they have hurt someone who is taken away in an ambulance and images of a lawsuit suddenly dance before their very eyes.
In either situation, insurance is a life saver. But how much insurance do you need? This is a very complicated question to answer, but our accident lawyer reviews some key considerations.
Buy The Minimum At Least
If you are registering a vehicle, you need the minimum insurance. Currently, Georgia requires that you carry the following:
- $25,000 in bodily injury liability per person injured
- $50,000 in bodily injury liability per accident (two or more people injured)
- $25,000 for property damage
Let’s break these down. Bodily injury liability will cover costs associated with another person’s bodily injuries. Think medical bills, lost wages, and pain and suffering. Because it’s liability, a victim can only make a claim on your policy if you are at fault for hurting them. If you aren’t, they can’t make a claim.
The same with property damage. If you are at fault for a wreck, they can make a claim on your policy for car repairs and repairs of any other damaged property.
The above limits look pretty low, to be honest. A broken bone that needs surgery can easily eat up $25,000, possibly more. A more serious spinal cord injury could cost well over $100,000.
Consider Whether To Buy More Liability Coverage
Although the above are minimums to be in good standing with the law, you might want to buy even more. There is a simple reason for this.
Anyone who causes a wreck can be sued for compensation. However, most cases settle because the injured victim comes to an agreement with the at-fault driver’s insurance company. Reaching a settlement is faster and less stressful, so most people will happily avoid the lawsuit.
However, there are some situations where they will go ahead and sue. For example, their losses might dramatically exceed your coverage limits. As stated above, $25,000 is not a lot of coverage. A couple nights in the hospital and a few weeks away from work, and suddenly a person has $100,000 in losses or more. Why should they settle for a measly $25,000 if that’s all you have?
Instead, they could sue. And if they win their lawsuit, they could seize property that you own, including your bank accounts, home, vehicle, etc.
Of course, you might have few if any assets, which means you are “judgment proof.” That’s the lingo in legal circles. If you are judgment proof, then buying only the minimum makes sense. No one will sue you because no one can collect anything from you. But people with more assets should get more.
Analyze How Much Liability Coverage You Need
It’s hard to generalize how much coverage you should buy. But take stock of your assets. Under Georgia law, a person who wins a lawsuit against you is a judgment creditor, and they can seize most assets in your name.
Some general rules of thumb:
If you are just starting out in life or are retired with few assets, you might purchase $50,000 in bodily injury liability, up to $100,000 per accident, and $50,000 in property damage. This is basically double Georgia’s minimums. It provides some decent protection in the event you hurt someone in a wreck. The property damage number should be adequate for most car accidents.
However, if you are an average middle class person with a home, savings, retirement, and other assets, you should consider buying $100,000 in bodily injury liability, up to $300,000 per accident, and $100,000 for property damage. This provides much more protection. Even if someone had a little more than $100,000 in losses, they might quickly settle rather than go through the expense of a lawsuit.
Wealthy individuals should probably discuss buying an umbrella policy with an insurance agent. This type of policy will provide much more protection, up to $1,000,000 or more. It also covers home insurance and lawsuits for things like defamation.
You shouldn’t buy more insurance than you can afford. There’s no point going bankrupt and losing your home in bankruptcy all because you wanted to buy more insurance than you can reasonably pay.
Look at your budget and assess whether you can eat the increased costs. The more insurance you buy, the more you will pay. However, many people can cut elsewhere to free up the cash for more insurance.
According to The Zebra, bumping up to 50/100/50 coverage costs the typical driver roughly an extra $6 a month. This is very affordable. Going up to 100/300/100 costs close to an extra $100 a month—which might be harder for some people to stretch.
The premium you pay will depend on many factors, including your age and driving history. You can shop around to check different offers from different insurers.
Buy Optional Insurance Products
To this point, we have discussed only liability coverage. But there are other insurance products on the market that you might want.
For example, every liability policy should come with uninsured/underinsured motorist insurance. You will get it unless you reject it in writing. Don’t reject it. You will not save a lot by rejecting it, and it is excellent coverage to have. For example, uninsured motorist insurance kicks in if an uninsured driver is at fault for a wreck and hurts you. Underinsured motorist coverage will pay compensation if you exhaust the other driver’s policy.
You should also consider buying:
- Collision. This insurance will pay to repair your car after a wreck, even if you are at fault.
- Comprehensive. A comprehensive policy pays to repair damage sustained in something other than a crash with another driver. It can cover fire damage, flood damage, and theft.
- Medical payments. If you were to blame for the wreck, you have few options for getting someone to pay for your injuries. But medical payments will.
The costs of these policies vary. Check whether they fit your budget.
Call Us After A Wreck
MG Law has helped countless people settle insurance disputes following a car accident. Let us help. You can schedule a free consultation by reaching out to us online.