The Truth about State Minimum Limits.
We get it, no one likes paying for insurance. That is, until you need it. Let’s pretend for a minute that you are driving to work, just like any other day. You might get distracted, just for a second, then look up and BAM! You just caused a major accident, multiple cars are involved, and people are possibly injured. In that moment, does it really matter to you how much your insurance costs? No! In that moment, you’re thinking I hope no one is hurt, and I hope I have enough insurance to cover the damage I just caused.
Here’s the truth: state minimum limits are not enough. The minimum required liability insurance in the State of Texas is 30/60/25. Maybe no one has ever explained to you what this actually means. You may have told your insurance provider or broker, “I want the cheapest insurance you can offer,” and that’s what they gave you, never bothering to explain what you were getting.
Let’s breakdown the state minimum limits in Texas.
Bodily Injury per person: $30,000. That’s right folks. That accident you just caused because you were distracted for a split second killed someone. There family is only going to receive $30,000. Your insurance company is going to write a check for $30,000 and walk away. From that point forward, you are on your own.
Bodily Injury per accident: $60,000. Remember, you caused a multiple car incident. There is a good chance that more than one person is hurt. Everyone who was hurt now must split $60,000. Do you think that $60,000 is enough to send 3 people to the emergency room, cover x-rays, and deal with any other medical treatment that they may need? Definitely not.
The last number is Property Damage, $25,000. Today, as I am writing this article, the average price of a new car is $37,000. Again, you had an accident that caused damage to multiple cars. You probably already realize that $25,000 is not going to cover fixing or replacing all the cars in the accident. Again, in this situation your insurance company is going to write a check for $25,000, close the claim, and you are going to be completely alone from that point forward.
Once your 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.
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 could be the safest driver on the road, maybe you’ve never had an accident. However, if you ever do have an accident you have no way of controlling how bad that accident is. You’re buying insurance to protect YOU. Make sure you buy enough.