Doug Myrick's Blog

State Minimum Limits, are they worth it?

Long and short, no. States have to legally set limits on auto insurance. In Illinois they are 25/50/20.  Meaning $25,000 bodily injury per person, $50,000 bodily injury per occurrence, $20,000 property damage.  What do all these numbers mean?  

The numbers above mean if you are in at fault accident that is the amount of money your insurance will cover for injuries and damages sustained. What happens if those limits don't cut it, well then YOU are responsible for paying the difference. Also, depending on how bad the accident is you could possibly have a lifetime of payments ahead of you.

Some people we talk to say that they are willing to risk it. Why? Well it's simple, the lower the limits the less expensive your premiums are. All be it, it may be less expensive on paper but is it worth it in the long run if you get into an accident that seriously hurts someone and their medical costs are more than the coverage you have in force, since you opted for state minimum.

You do the math and tell me...

You're in an at fault accident with 4 people in the other car. Person A has minor injuries that cost $5,000. Person B has injuries that cost $15,000. Person C has injuries that cost $15,000. Person D got hurt the worst and had a hospital stay that cost $40,000. Their car was totaled and 2 parked cars also got damaged- all those totaled $40,000. 

Here are the totals: Medical expenses: $75,000 (your limits are $25,000/$50,000) you will owe: $25,000. Property damage (your limit $20,000) you will owe $20,000.  In total for this accident you would owe: $45,000 out of pocket for expenses not covered by your insurance limits.

The numbers keep increasing. Is it worth it to have large out of pocket costs to have cheap insurance?

Want to make sure you have proper coverage, let us know, we are here to help make sure you and your assets are protected.