Tag: liability limits

Auto Liability Insurance: How Much is Enough?

Posted on by butlervetinsurance

Do you know what the three numbers that are usually written like this xx/yy/zz on your Auto Liability insurance?

The first number refers to the maximum amount of Bodily Injury Liability (BI) for an individual injured in an auto accident; the second is BI per coverage per accident; while the third covers Property Damage Liability (PD) per vehicle. For example a policy with 30/60/15 Liability coverage would pay up to $30,000 in BI per individual, $60,000 worth of BI per vehicle, and $15,000 in PD per vehicle.

Every state requires drivers to carry a minimum amount of Liability coverage under their Auto policy. Limits by state vary from 10/20/10 in Florida to 80/100/25 in Maine. These numbers have remained fairly stable for a number of years.

However, because a car accident can cost far more than the Liability minimums that most states require, people usually carry more coverage. The Insurance Information Institute recommends that you have at least $100,000 of BI protection per person and $300,000 per accident (known as 100/300).

If you hold the minimum coverage required by your state and you’re involved in an accident in another state that requires higher minimum coverage, the chances are that your policy limits will increase automatically to meet the other state’s minimum requirements.

We’d be happy to make sure that this feature applies under your Auto insurance– and to discuss the most cost-effective ways of protect yourself and your family from liability for accidents behind the wheel (such as increasing your Liability coverage or choosing higher deductibles).

For a complimentary review of your policy, just give us a call. 877-994-6787

‘Aggregate’ Coverage Means ‘ALL OF IT’

Posted on by butlervetinsurance

An important question when purchasing an insurance policy is “How much will it pay when I need it?” Most coverages, such as Property, the answer is fairly clear — the amount listed on the front page of the policy (known as the “declarations page”) for the specified property is the most you can collect for a loss to it. For damage to an auto, the policy usually sets a maximum payment equal to the current “book” value of a similar vehicle in similar condition.

Some policies have another limit — called an “aggregate” — on coverages. For example, your Liability insurance will set an aggregate limit: Basically the maximum amount the policy will pay in a given year for all damages under the policy, no matter the size or number of the claims. Depending on the nature of your business, the amount you’ll consider adequate for your aggregate can differ greatly from what’s enough to cover any single claim. Many policies automatically provide an aggregate equal to double your amount per claim (or “per occurrence”). Is this enough to meet your needs?

Let’s sit down and discuss the aggregate limits under your current policies. If they’re satisfactory, great! For those that don’t meet your needs, due to changes in valuations or business procedures, we’ll work with you to make the needed updates now, before you find yourself falling short tomorrow. Give your Protection Coach a call at your convenience.

State Minimum Auto Liability Coverage: Is It Enough?

Posted on by butlervetinsurance

State minimum insurance requirements are minimal. Most states demand less than $100,000 for bodily injuries and $50,000 for property damage. Some states require only $10,000 for property damage coverage.

How many cars valued at greater than $10,000 travel the highways? How many trucks carrying cargo are worth more than $10,000? $50,000? $100,000?

According to the 2010 census, the median family net worth exceeded $200,000. That amount includes houses, cars, savings, retirement funds, cash in the bank, college savings, and furniture and personal effects. Half the families are worth more, half have assets less than $200,000; all of it is hard earned.

If the family is underinsured for liability, their net worth is vulnerable to be seized in a lawsuit based on injuries or property damage caused by any family member driving a vehicle. The car owner and the car driver become parties to the suit.

Bodily injuries sustained in car wrecks devastate lives. People unable to work, the high cost of medical treatment, rehabilitation expenses, and the pain and suffering can only be compensated with money. The money comes from the insurance company or the liable party’s personal wealth.

Not convinced you need higher limits? Not all liabilities are released in bankruptcy. Many states have specific legislation disallowing debt reduction for certain accidents, most notably driving while intoxicated. Wage plans reduce take home pay by as much as 33%. Many employers do not tolerate either bankruptcy or wage garnishments.

Still not convinced? How about a selfish motivation?

Other drivers are either uninsured or underinsured. Most insurance companies will not provide uninsured motorist coverage in limits greater than the liability limits of the policy.

Uninsured and underinsured motorist coverage from your policy pays on behalf of the driver who hits you if they are poorly insured. In a classic exercise of the golden rule, insurance companies only sell limits commensurate with the protection you offer others.

Proper limits of liability allow you to protect yourself from the improper coverage other people maintain.

So how much coverage is enough? What are reasonable limits of liability?

Call our knowledgeable Protection Team to get the right answers to your questions. And consider this:

Your assets are your excess insurance coverage. This means that when the limits of your policy are reached, your assets are at risk. Excess insurance – Umbrella policies, for example – is available in $1 million layers over your Automobile and Homeowners liability limits if those limits qualify – are high enough. Protect yourself against underinsured drivers by increasing your uninsured motorist coverage.

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