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 experienced Atlanta car accident lawyers review 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.
Is the Minimum Enough?
While the minimum coverage is better than nothing, it’s often NOT ENOUGH for most drivers. These state minimums have fairly low limits, leaving you exposed to a potential financial crisis if you cause a serious accident. For example, a broken bone orsurgery can easily eat up $25,000, possibly more. A more serious traumatic brain injury or TBI could cost well over $100,000. If your insurance doesn’t stretch that far, you could be left paying out of pocket. Also things like a DUI raise the potential for punitive damages and even larger amounts owed.
It’s also important to realize that state minimums generally won’t help with your own car’s repairs after an accident. That means if you want coverage for your own vehicle, you’ll need more than just the legal minimums, you will want full or comprehensive coverage.
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.
Build a Policy That Fits Your Needs
With a basic understanding of the main types of car insurance, you can tailor your policy to your specific needs. Liability insurance protects you from lawsuits, but comprehensive and collision coverage protect your own vehicle. If you want better peace of mind—and protection for your own car—consider purchasing more than the minimum coverage.
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:
Starting Out
If you are just starting out in life or are retired with few assets and rent your home or apartment, 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.
Some Stuff to Protect
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. Home ownership is a big part of the American dream. Protecting your home and investment includes getting enough car insurance. 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.
Moving on Up
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.
If you have a collection of assets—such as a home, investments, or a sizable savings account—consider purchasing enough liability coverage to fully protect what you could lose in a lawsuit. For many, that means well above the state minimums. For example, a policy providing $250,000 in bodily injury liability per person, $500,000 per accident, and $100,000 for property damage offers far more security than the typical minimum coverage. But even that may not be enough without an umbrella on top of that.
Quick Tip: Get a quote for your umbrella coverage from the same Insurance company as your liability to avoid unnecessary coverage issues.
For additional peace of mind, umbrella insurance picks up where your auto and home policies leave off. These policies are surprisingly affordable, often less than $1,000 for the first $1 million in coverage. The amount of protection they offer and can save your assets from being wiped out in the event of a catastrophic accident or lawsuit. Make sure your umbrella covers all your assets, including a second home, rental property, golf carts, jet skis, and other potential liabilities.
Consider Costs
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.
What Determines Your Insurance Premium?
The premium you pay will depend on many factors, including your age and driving history. But that’s only part of the equation. Insurance companies will also look at the type of vehicle you drive, the amount of coverage and deductibles you choose, and even your location. For example, a brand-new sports car in downtown Atlanta will likely cost more to insure than a used sedan in a rural Georgia county.
Be Accurate When Shopping Around
If you want an accurate quote, be scrupulously honest with the information you provide. It might be tempting to fudge details—like how many miles you drive or where you park overnight—but supplying faulty information can backfire. If your insurer discovers you weren’t truthful, they can cancel your policy or recalculate your rates (usually NOT in your favor).
You can—and should—shop around to check different offers from different insurers. Just make sure you’re comparing apples to apples, using the same coverage levels and honest information each time.
How to Compare Car Insurance Quotes the Smart Way
Once you have a sense of what coverage levels fit your needs and budget, it’s time to shop around. Comparing quotes doesn’t have to be difficult, but there are a few easy tips to keep the process fair and productive:
Match Apples to Apples: When gathering quotes, always use the same coverage limits, deductibles, and add-ons with each insurer. Otherwise, you’re comparing a Granny Smith to a Golden Delicious—and no one wants a surprise at claim time.
- Get Multiple Quotes: Aim for at least three or four quotes, using well-known companies like GEICO, State Farm, Allstate, and Progressive, along with smaller regional insurers. This way, you’re more likely to spot a deal—and avoid paying extra just for a familiar jingle.
- Check for Discounts: Many insurers will apply discounts for things like bundling policies, safe driving, anti-theft devices, or even defensive driving courses. Don’t be shy about asking for every possible reduction.
- Evaluate Service, Not Just Price: Consider the insurer’s reputation for handling claims, customer service, and overall satisfaction. A rock-bottom premium isn’t much help if you can’t get someone on the phone when you need them.
- Review Every Detail: Go over the declarations page in each offer. Double-check that you aren’t missing key protections or paying for something you don’t need.
A little legwork up front can keep more money in your pocket—and deliver real peace of mind. Once you’ve picked your provider, you’ll know you’re truly getting the best value for your needs.
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.
Why Uninsured/Underinsured Motorist Insurance Matters
Uninsured motorist (UM) and underinsured motorist (UIM) coverage do far more than simply pay your medical bills. This type of insurance can provide compensation for:
- Funeral expenses if the worst happens.
- Lost wages if you’re unable to work due to injuries from the accident.
- Medical expenses for you and your passengers, regardless of who was at fault.
- Pain and suffering you or your passengers experience as a result of the crash.
- In some states, damage to your own vehicle (if you have purchased UM property damage coverage).
It’s worth noting that uninsured motorist insurance does not protect the at-fault driver—they’re responsible for their own losses. Instead, UM/UIM is there to keep you and your family from being left with the bill when someone else’s lack of insurance puts you at risk.
Without this coverage, if you’re hit by an uninsured or underinsured driver, you could be on the hook for significant costs—so this is not the place to cut corners, even if you’re on a budget.
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.
How Much Uninsured Motorist Coverage Should I Buy?
As a rule of thumb, you should carry uninsured/underinsured motorist coverage in amounts equal to your liability policy. If you opted for $100,000/$300,000 in bodily injury liability, you’ll want the same levels for UM/UIM coverage. Matching these limits ensures you have the same financial protection for yourself and your passengers as you do for others if you’re in a wreck with a driver who has little or no insurance.
MUST HAVE: Getting UM limits equal to your liability is not negotiable. You want to protect YOUR family and cannot rely on other drivers to have enough insurance. As many as 1 in 8 drivers have no insurance in some states.
Many insurers automatically offer matching limits, but double-check your policy just to be safe. While you could technically select a lower amount, it’s rarely wise—scrimping here saves very little, and the coverage is too important to skimp on. In short, mirror your liability limits to give yourself adequate peace of mind.
How Much Medical Payments Coverage Should You Get?
Deciding how much MedPay to buy depends on your own risk tolerance and financial situation. Most insurers offer coverage in small increments—typically from $1,000 to $5,000—but you can usually purchase higher limits if you want more peace of mind.
Think about your existing health insurance coverage and your ability to pay out-of-pocket medical expenses. If you have high deductibles or limited health insurance, opting for a higher MedPay limit may give you extra security after a wreck. In general, many people settle on $5,000 or more in coverage just to make sure hospital bills or ambulance rides are covered, regardless of who caused the accident.
Think of this as a plus-up and add-on, not a must-have. Ultimately, choose an amount that fits into your budget without straining your finances, while still giving you a financial cushion for unexpected injuries.
Deciding on Collision and Comprehensive Coverage
When choosing how much collision and comprehensive coverage to buy, keep in mind you’re not picking a dollar amount like you do with liability. These coverages typically pay for repairs or, if your car is totaled, the current market value of your vehicle.
The real decision is in your deductible—the amount you pay out-of-pocket before insurance kicks in. If you want to lower your monthly premiums, you can opt for a higher deductible. For example, selecting a $1,000 deductible instead of $500 can save you money each month, but be sure you have that amount set aside in case you need to file a claim.
QUICK TIP: For a lower rate of insurance, raise your deductible instead of reducing coverage. That way, you keep the peace of mind from adequate coverage but don’t pay as high of a price.
Ultimately, the right balance depends on your vehicle’s value and your personal comfort with risk. If your car is new or valuable, keeping both types of coverage makes sense. But if you drive an older car that isn’t worth much, it may not be cost-effective to pay for this coverage year after year. Always weigh the potential payouts against what you’re putting in, and consider your financial situation carefully before deciding.
The costs of these policies vary. Check whether they fit your budget.
What Is Gap Insurance and When Should You Get It?
Another type of coverage to keep in mind is gap insurance. This coverage steps in if your vehicle is declared a total loss after an accident. Here’s how it works: If the amount you still owe on your car loan or lease is greater than your car’s fair market value (what your standard insurance will pay out), gap insurance covers the shortfall.
Think of gap insurance as a safety net for people who have a sizeable auto loan or lease, especially if their car’s value depreciates faster than they’re paying down the loan. If you made a small down payment, have a long loan term, or simply owe more than your car is worth, it’s wise to consider adding gap coverage to your policy. In the event of a total loss, you won’t be stuck making payments on a car you no longer have.
MUST HAVE: Getting in a wreck when you still owe money on your car makes you the loser, even if it was someone else’s fault. If you have a car loan, make sure you have Gap Insurance.
The costs of these policies vary. Check whether they fit your budget.
Rental Reimbursement Coverage: Do You Need It?
Rental reimbursement coverage is another option worth thinking about. This add-on helps pay for a rental car or alternative transportation (like a bus or train) if your vehicle is in the shop after an accident that’s covered by your policy.
So when is it useful? Imagine your car is being repaired after a collision or other covered loss. Instead of scrambling for rides or paying out of pocket, this coverage steps in to offset the cost of a rental. For drivers who can’t afford to be without a car—even for a few days—rental reimbursement can be a lifesaver.
It’s important to remember, though, that not every shop trip qualifies—this protection only applies if the repairs are from a covered event (not routine maintenance or breakdowns). Depending on your lifestyle and how essential your vehicle is, rental reimbursement can offer valuable peace of mind during the inconvenience of unexpected repairs.
How Much PIP Insurance Should You Carry?
Personal Injury Protection (PIP) is not available or required in Georgia. If you live in a state where Personal Injury Protection (PIP) is available or required, the amount you should buy depends on several personal factors—much like liability coverage. Here’s how you can approach your decision:
- Evaluate Your Health Insurance: If your existing health plan is robust, you might not need the highest PIP option. However, PIP often covers costs your health insurance won’t, like lost wages or essential services after a crash (think: childcare or household help if you’re sidelined). That can be a lifesaver—even with “good” health coverage.
- State Requirements: Some states make PIP mandatory, and you can’t opt out. In others, you can decline it. Always check what your state law says before making decisions.
- Typical Coverage Choices: Basic PIP coverage usually pays a percentage (say, 80%) of actual medical bills and a share of lost wages. “Extended” PIP options cover a higher percentage—sometimes up to 100% of medical expenses and more of your missed income.
As a practical rule:
- If you don’t have much in the way of existing savings or paid sick leave at work, opting for more generous PIP limits can provide peace of mind.
- If you already have strong disability coverage or a financial cushion, basic PIP may do the job.
Ultimately, weigh what you can reasonably afford against your risk tolerance and what gaps exist in your other insurance policies. It’s always wise to err slightly on the higher side if it means you’ll avoid big financial shocks after an accident.
What Is Personal Injury Protection (PIP) and What Does It Cover?
Personal Injury Protection (PIP) is not available or required in Georgia. Another coverage worth considering is personal injury protection, or PIP. Think of PIP as a safety net for your own medical expenses after a car accident, regardless of who was at fault. It not only helps pay for your medical bills and those of your passengers, but it can also cover lost wages if you’re too injured to work, funeral costs, and even services you might need if you’re laid up—think house cleaning or child care you can’t handle while recovering.
The availability of PIP varies by state. In some places, having PIP is required as part of no-fault insurance laws; in others, it’s purely optional, and in a few states, it’s not even offered. If you live in Georgia, you might not be required to buy PIP, but knowing it’s available elsewhere can help you weigh all your options—especially if you travel or move often.
The costs of these policies vary. Check whether they fit your budget.
Roadside Assistance Coverage
Another optional policy to consider is roadside assistance coverage. This type of insurance provides support when your car leaves you stranded for reasons other than an accident. If your vehicle breaks down, gets a flat tire, or even if you accidentally lock your keys inside, roadside assistance can lend a hand.
Typical services include:
- Towing your car to a nearby repair shop
- Jump-starting your battery if it dies
- Delivering fuel if you run out of gas on the road
- Helping with a flat tire change
- Locksmith services for those “oops, the keys are inside” moments
Roadside assistance can be a small add-on to your auto policy but comes in handy during unexpected hiccups—saving you from scrambling for help (or worse, a long walk to the nearest gas station). Make sure to check the details of what’s covered, as plans can vary between insurers.
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.
