Written by: April Daniels
Have you ever heard the phrase "When it comes to insurance I have the state minimum? Or have you asked your insurance agent to make sure you had the "state minimum" coverage on your policy? What does that really mean?
What is required?
In the state of Ohio you are legally required to have insurance to drive a vehicle. The minimum required insurance coverage according to the Ohio BMV* is $25,000 for bodily injury/death of one person, $50,000 for bodily injury/death of two or more people, & $25,000 for property damage in an accident. To break this down even further bodily injury coverage is to protect you from a suit brought against you from a party that has had harm done to them in an accident. It is important to note that even if you think the person has not suffered any injury it won't necessarily stop them from filing suit against you. Property damage is coverage for another persons vehicle or property.
Why is this amount not enough?
The state minimum coverage in Ohio hasn't changed since December of 2013** and before that it had stayed the same for forty-four years. One thing that has changed since 2013 is the rising costs of vehicles and hospital stays
Let’s look at just the bodily injury coverage on an auto policy. Think about the last time you went to the hospital; how much was the total cost of your visit before health insurance? According to healthcare.gov site***, the average cost of a 3-day hospital stay is around $30,000. If you were involved in an accident and the person you hit was injured and spent a few days in the hospital, you would exceed your limits of liability. Also, the person you hit can also sue you for loss of wages or for pain and suffering. You could easily be well over the $25,000 limit your policy has coverage for.
Now let’s look at the property damage portion of an auto policy. Here is the Edmunds.com**** MSRP pricing on some common new cars you’ll see out on the road this year: 2022 Hyundai Tucson - $24,950-$37,650, 2022 Ford F150 - $37,700-$77,760, and 2022 Jeep Grand Cherokee - $36,980-$44,850. A lot of newer vehicles out today cost more than the $25,000 and if they were totaled in an accident you could easily be over the limit your policy has coverage for. You could also be involved in a multiple car accident and be well over your $25,000 limit of coverage.
So, what can happen to you if your limits are not high enough?
If you are in an accident and another person or persons is injured, they can hire a lawyer to attempt to get a judgement against you. They can put a lien on your savings account, home, car, or other financial assets you may have. If you don’t have any assets, they can also attempt to garnish your wages.
This is why it is important to have higher limits of liability to protect yourself and your assets. Often higher limits of liability are only a few dollars per month more. Do you know what limits of liability you have on your car insurance right now? If not call us and we can advise you!