By Emily Delbridge. Car Insurance and Loans Expert
Emily Sue Delbridge has a strong family history in the insurance industry. She has been in the insurance business since 2005 with her primary focus on personal lines insurance. Read more
Everyone wants to pay low insurance rates. However, purchasing the cheapest car insurance policy can prove to be very expensive when an accident occurs. Each state has it's own set of minimum car insurance coverage limits. Whether that is the right coverage for you is a different story. Learn more about state minimum insurance and why most insurance agents encourage higher limits of coverage.
What is State Minimum Insurance?
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Purchasing at the very least the minimum coverage is required in order to drive your vehicle legally. Unfortunately, the state minimum limits are often too low to actually cover the damage sustained in accidents.
What are the Preferred Limits of Liability?
100,000/300,000/100,000 is the recommended amount of liability for most drivers.
100,000 = bodily injury per person
300,000 = bodily injury per accident
100,000 = property damage
Liability limits cover the other person in an accident. It is not difficult to rack up high medical bills and expensive property damage repairs after a car accident .
Your state's minimum coverage could be as
low as 15/30/5 like California. Take a moment and think about how low those limits actually are. How easy is it to cause more than $5,000 in property damage when in a car accident?
For Example: You are driving down the road and realize you are going to miss your exit. You quickly switch lanes and do not see the new BMW convertible in your blind spot. You clip the front end of the vehicle and run into a guard rail. Because you are at-fault, your car insurance property damage will be responsible for covering the damages to the BMW and the guard rail.
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The total damage is nearly $15,000! But, you only have the $5,000 state minimum limit for property damage. The other driver and city can go after you personally for the additional repairs your car insurance will not cover. *Michigan has it's own set of rules*
So, should you purchase your state's minimum car insurance coverage?
Insurance carriers often reward drivers for carrying higher limits of liability for extended periods of time. Getting a quote on car insurance can result in cheaper rates if the potential insurance company sees you have been carrying 100/300 limits on a prior policy. It shows responsibility and that is what insurance carriers are looking for, responsible drivers.