This post is part two of the blog post that answers the question “How much car insurance is enough?”
Compensation for Harm You Cause Others
It is hard to imagine being responsible for injuring another person, but it happens every day. If you cause an accident, you are financially liable for any injuries that occur. It does not matter what the events were leading up to the accident or if you are only partially at-fault. You can be held liable for compensatory damages, as well as punitive damages if you exhibited neglect at the time of the accident. Bodily injury liability insurance is designed to protect you against the high costs of accident-related injuries, including victim medical bills, lost wages, emotional distress, and more. If you are sued, your bodily injury liability insurance will pay the damages up to the limits of your policy.
We have many customers throughout Wisconsin and Minnesota. Though the car insurance laws in those states differ, both require drivers to carry bodily injury liability coverage. Here at Noah Insurance, we recommend purchasing high-limit bodily injury liability coverage since the mandatory limits required by state laws are much too low to protect most drivers’ income and assets against litigation adequately.
Split Limits vs. Combined Single Limit (CSL)
There are two types of bodily injury liability limits – split limits and combined single limits (CSL). You might recognize a split limit as two separate numbers appearing on your policy, the first of which indicates the maximum coverage per individual and the second showing the maximum total coverage for all victims combined, per accident. A 250/500 split limit, for example, would pay up to $250,000 per injured individual and $500,000 total combined bodily injury liability per accident. The combined single limit is different since it does not cap the maximum coverage per individual. Instead, you might have a 300 CSL, which would provide up to $300,000 in bodily injury liability coverage per accident, regardless of how many victims it is divided between.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
Uninsured drivers put others at risk when they fail to purchase proper liability coverage. If you are injured by an uninsured driver, recovering compensation for your injuries could be difficult. Uninsured motorist (UI) coverage is available to drivers in both Wisconsin and Minnesota. It helps cover you and your passengers for injuries caused by an uninsured driver. Underinsured motorist protection (UIM) is also available. This coverage bridges the gap between an at-fault driver’s inadequate coverage and the actual cost of your injuries.
For our Minnesota customers, Personal Injury Protection (PIP) is standard coverage within your policy. This important coverage serves as the primary coverage for injuries to you and your passengers regardless of who was at-fault for the accident. Minnesota imposes minimum PIP requirements, although you may opt to purchase additional coverage for your policy.
Money to Help with the Little Things
No one likes to be nickel and dimed, but that is what it might feel like when you pay the ‘small’ expenses out-of-pocket after a car accident. Things like towing charges and rental car fees can add up fast, as can the cost of health insurance deductibles and co-pays. We here at Noah Insurance can help minimize your financial burden after an accident by adding helpful coverage that enhances your policy’s benefits.
Beyond Car Insurance
Lastly, we recommend reviewing your liability coverage needs to determine how much you might need to protect your income and assets against a major claim fully. Having high limits on your car insurance is a good start, but it may not be enough to prevent financial devastation in the event of a lawsuit. A young victim, for example, could sue you for millions of dollars to compensate for medical bills, emotional distress, and a lifetime of lost future wages. In this case, your car insurance might pay a maximum of $250,000 and leave you with the remaining damages to pay out-of-pocket.
Umbrella insurance can fill in the gaps between your maximum car insurance liability coverage and your actual liability after an accident. Umbrella policies are typically very affordable since they serve as secondary coverage to your primary insurance. Once you exhaust the limits on your car insurance, your umbrella policy can begin paying, extending your coverage by an additional $1 million or more. Contact our office for more information about umbrella insurance and to find out if it could be right for you.