The Truth about Buying State Minimum Liability Limits.
Buying state minimum liability limits is never in your best interest. You can usually buy much better limits for just a few dollars more a month.
We get it, no one likes paying for insurance. Often customers tell us they just want the “cheapest” insurance they can get. Many agents will quote state minimum liability limits and never explain what that means or why you should buy more.
Why should you buy more than State Minimums.
Simply, buying state minimum liability limits is not enough. The minimum required liability insurance in the State of Texas is 30/60/25. Perhaps no one has ever explained to you what this means. You may have told your insurance provider or broker, “I want the cheapest insurance you can offer,” and that is what they gave you, never bothering to explain what you were getting.
What are the state minimum limits in Texas?
Bodily Injury per person: $30,000. Bodily injury pays the lost wages and medical expenses for the injured party should you be deemed liability for the accident.
Bodily Injury per accident: $60,000. In an accident where more than one person is injured everyone who was hurt now must split $60,000 not to exceed $30,000 per person.
Property Damage, $25,000. In June of 2021 the average price of a new car is $41,263 and expected to continue to increase according to Kelley Blue Book. Should you have an accident that causes damage to multiple cars $25,000 most likely is not going to be enough to repair them or if you are responsible for totaling someone’s brand new car it will not be enough either.
What does that mean?
Once the insurance company has exhausted the limits, they no longer have a duty to defend you. You are now exposed to being sued personally. How much money do you plan to make in the future? Do you own a business? Have a trust? You are now at risk for a significant lawsuit, all because you saved a few dollars on subpar insurance.
What should you do?
It is in your best interest to carry the MAXIMUM liability limits you can afford and purchase a $1M umbrella policy to blanket over your auto and home insurance. You may be the safest driver on the road, maybe you have never had an accident. However, if you ever do have an accident, you have no way of controlling how bad that accident is. You are buying insurance to protect YOU. Make sure you buy enough.
Read our guide to buying auto insurance here.