Auto Liability: Why You Don’t Have Enough of It

If you have a car, you have auto liability coverage.  But do you have enough?

For a lot of people, auto insurance is not something that protects you, but instead is just another hoop to jump through in order to drive legally.  Insurance offices around the country receive calls every day from people who want whatever the lowest amount of coverage is in that state to satisfy the legal limits of liability.  When we ask what kind of coverage they are looking for, the answer we get is, “Whatever is the cheapest.”

Unfortunately, this view of auto liability insurance is not just wrong, it’s dangerous.  According to the Association for Safe International Road Travel, accidents in the U.S. total $230.6 Billion in damages a year.

That’s a lot of money, and it means that everything that happens, from fender-benders to multi-car pile ups, happen with disturbing regularity.  And they cost more than they ever have, with a new car averaging over $30,000 in 2017.  When you consider that most states have minimum limits at around this mark, for example $25,000 of Property Damage coverage in NC, that makes for a very expensive problem with only one accident.  In the video above, I talk about how disastrous it could be hitting a new Mercedes if you have the minimum limits of coverage.  But you don’t even have to hit and total a high-end vehicle to exceed your minimum limits and owe tons in out-of-pocket damages.

It is even worse if someone is injured, and the sad truth is that people get injured a lot in auto accidents.  Over 2.35 million people are injured or disabled in accidents every year!  Even worse, 37,000 are killed in auto accidents per year in the U.S.  Not only are these numbers tragic and staggering, they are also incredibly expensive.

If you hurt someone in an auto accident, the costs can be massive.  Injuring a person in an accident costs on average over $20,000, while disabling someone averages over $50,000.  The worst case scenario, ending someone’s life in a car accident, is the most expensive, with an average cost of over $1 Million dollars for each fatality.  In a flash, minimum limits like North Carolina’s $30,000 per person, $60,000 per accident can be exceeded, leaving you with a fortune in out-of-pocket expenses.

And that doesn’t even account for potential lawsuits.  (That’s why you need an Umbrella policy.)

Having minimum limits is unnecessarily rolling the dice with your entire financial future.  One mistake could cost you your entire life savings.  And the cost of properly insuring yourself with higher limits of liability really isn’t that much more.  At Alliance, we regularly recommend 100/300/100 in order to protect our insureds from the realities of today’s roads.  Don’t take the risk on yourself when there is an entire industry designed to do it for you.  If you think you may have lower limits of liability, give us a call or email us and let us take a look at your coverage.  You may be surprised at how little it would cost now to save a ton in the future.

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