How Much Auto Insurance Do I Need?

How Much Auto Insurance Do I Need?

Before you hit the road, have you considered if your auto insurance coverage is enough to protect you and your loved ones in case of a collision? Here’s something important to consider: One in seven drivers doesn’t have insurance, according to a 2023 study by the Insurance Research Council (IRC). This could be because they can’t afford it or simply forget to pay their bills, but why should this concern you? Should a collision occur involving one of these uninsured drivers, you might encounter a financial strain.

Over the years, we’ve seen countless clients face the aftermath of motor vehicle collisions. It’s heartbreaking. Through no fault of their own, they suffer serious injuries or death. Then, when the other driver is uninsured or underinsured, our clients often have to bear the financial costs, sometimes leading them into debt.

The fact is, it doesn’t have to be this way. We emphasize to everyone we know: make sure you have enough insurance coverage. Having a comprehensive policy with higher policy limits can make all the difference when it comes to receiving quality healthcare and managing medical bills after a collision. While the law mandates a minimum level of coverage, this is often not enough to cover the full extent of damages in many collisions.

So, how much insurance do you really need to protect yourself? The answer is as much as you can reasonably afford. Let’s break it down by the different types of coverage:

Personal Liability Coverage

What is it? If you injure someone in a collision, your insurance will pay for their injuries.

How much do I need? According to Indiana law, a minimum of $25,000 per person and $50,000 per collision are required. However, injuries in collisions can easily exceed these limits, leaving you responsible for the remaining costs.

 

Property Damage Coverage

What is it? This coverage pays for damages you cause to someone else’s property.

How much do I need? The legal minimum in Indiana is $25,000 per collision. But if you total a $35,000 car with just the minimum coverage, you could be liable for the remaining $10,000 out of pocket.

 

Medical Payment Coverage

What is it? This coverage pays for medical bills, including deductibles and co-pays, for you and your passengers, regardless of who is at fault in the accident.

How much do I need? There is no legal requirement for this type of coverage, but without it, you could face significant medical expenses after an accident.

 

Uninsured and Underinsured Motorist Coverage

What is it? If you or your passengers are injured by a driver without insurance or with insufficient insurance, this coverage pays for the damages.

How much do I need? This coverage isn’t necessarily required (a policyholder can choose to reject the coverage in writing), but it’s highly recommended. Without it, you likely can’t recover damages if you’re struck by an uninsured, or underinsured, motorist. Accordingly, you might have to shoulder significant costs on your own.

 

Our Recommendation

At a minimum, you should have $100,000 to $300,000 in personal liability, uninsured, and underinsured motorist coverage, as well as $10,000 in medical payments coverage. This exceeds the legal requirements but typically doesn’t add much to your premium.

If your budget allows, consider increasing your coverage to $250,000 to $500,000 in personal liability, uninsured and underinsured motorist coverage, and $10,000 in medical payments coverage. Additionally, an umbrella policy with $1,000,000 in liability, uninsured, and underinsured coverage provides even more protection.

Surprisingly, the cost difference between basic and more comprehensive policies is often minimal. For example, two people on an insurance policy might only pay about $5 more per month for significantly better coverage.

 

Something to keep in mind

The cost of auto insurance varies based on factors such as your collision history, the make and model of your car, your age, gender, location, and more. Therefore, it’s wise to compare different policies to understand the cost of additional protection.

A motor vehicle collision is already stressful, without the added worry of medical bills and car repairs. Many clients realize too late that their insurance doesn’t offer sufficient coverage.

It’s frightening to consider that an uninsured, or an underinsured, driver could hit us. We want to protect our family from financial strain if something were to happen to someone we love. That’s why our representatives maintain a robust insurance policy for ourselves, our partners, and our children.

 

Need legal advice?

Take some time to review your insurance policy. Ask questions, do your research, and ensure you have enough coverage to protect yourself and your loved ones. It’s a small effort that can make a big difference.

If you’ve been injured in a collision, Johnson Jensen is here for you when you’re ready. Call 317.785.7574 or fill out our online form here: https://johnsonjensen.com/contact.