Public Service Announcement. Check your insurance limits.

[Irving]

Guys and gals, I occasionally come across claims where people run into their limits on their auto insurance. I really encourage you to raise your liability limits to whatever you can comfortably afford. I'd like to generate some discussion on what liability limits people carry and WHY. The state minimum from property damage in Colorado is $15,000. That's pretty low. Shockingly, the state minimum in California is only $5,000.

Anyway, on to some examples of property damage limits and where having low limits can get you into trouble. Please remember that there are many more things to run into than just vehicles when you are driving. Super cars may be rare, but all the other things are not.

$25,000 is low when you rear-end a 53' straight deck cattle hauler and put it out of commission for 3 months. It might only take $10,000 in parts to repair, but there is also the downtime and lost income (for both the business and employee) to consider.

$50,000 is low when you let your rental car roll into a Beachcraft King Air 200. <- go ahead and check the current sales prices on those, even if you go back 10-15 years in model year).

$100,000 in property damage is getting up there, until you black out behind the wheel and drive through a red light, hit a car, jump the curb and make contact with not one, but TWO houses.

$100,000 is the most common coverage amount I see. What happens when while driving on the highway, you bounce off a car on your left, collide with a semi-truck on your right, the semi-truck loses control off the shoulder on the right and impacts an elevated railroad track, flipping and totalling the truck, destroying ALL the time sensitive cargo in the full trailer, not to mention the damage to the railroad tracks?

Like I said before, there are a lot more things to crash into that cost a whole lot more than just an expensive car. For full disclosure, I almost never have limits issues, and I usually don't even think about a limits issue when someone carries at least $100,000, but stuff can, and does happen, and you don't want to get yourself in a bad spot if you can avoid it.

I'm not trying to come off as a shill or anything, I just really feel bad when I have to break the news to someone that the damage they've caused is beyond what I can pay for. I know I sure as heck wouldn't know what to do in that situation. Just something to consider.

[Teufelhund]

Good advice.

I'll throw in my $0.02 and say take a look at your home owners insurance coverage as well. When our house was robbed last year, we found out the hard way that the wife's jewelry was only covered up to $500. Who the fuck has less than $500 in jewelry?

[Irving]

That's great advice, but I'm not as well versed in that area. A lot of specific contents categories like Jewelry, guns, tools, etc top out at $2,000 unless a special rider is purchased. I've been hearing that a lot of people are underinsured on their contents coverage lately. This puts you in a pretty tough position if you have a total loss, or even just a large loss from a fire. Contents are tough because you don't really have a list of all the things you own. Just take a moment and try to make a quick mental list of every single item you have in the smallest room in your house. Now do that for your entire house. Oh you had a TV? What size? What brand? What model? A lot of us might know that info for their favorite stuff like the big TV, or the computer, but what about the microwave and the toaster? Heck I can't tell you a single brand of any appliance I even have, even the ones I've installed myself. It seems hokey, but it's not a bad idea to do a quick video inventory walk through of your house occasionally. I've never done that before, but it is so simple to do, I really have no excuse for not having done so.

[Graves]

I sure as hell didn't waste more than $500 on blang.

[ruthabagah]

Good post. Also to consider, your medical coverage if you, let say, have a motorcycle accident not imvolving a 3rd party, is usually 5k by default... my first hour of emergency care after my accident was 37k.... including a 1k, 3 miles, ambulance ride!

[roberth]

Very helpful, thanks Irving.

[cofi]

Well I have state min coverage....now I'm staying in the house for the rest of the month cause stu terrified me

[TFOGGER]

Good post. Also to consider, your medical coverage if you, let say, have a motorcycle accident not imvolving a 3rd party, is usually 5k by default... my first hour of emergency care after my accident was 37k.... including a 1k, 3 miles, ambulance ride!

Your wreck was cheap. In mine, they had spent nearly 50k by the time I got to the ICU, and another 60ish before I got out of the hospital 4 days later. Total medical from that incident has topped $122K. Because I had decent insurance, my total out of pocket on medical was about $700.

I carry policy limits of 50/100/300 on the cars for liability, considered upping them, just to be safe.

[hghclsswhitetrsh]

Also remember this people - insurance is wonderful until you need to use it.

[ruthabagah]

Your wreck was cheap. In mine, they had spent nearly 50k by the time I got to the ICU, and another 60ish before I got out of the hospital 4 days later. Total medical from that incident has topped $122K. Because I had decent insurance, my total out of pocket on medical was about $700.

I carry policy limits of 50/100/300 on the cars for liability, considered upping them, just to be safe.

37k was for the first hour....I spend 11 days in the hospital... final bill will be close to 250k when I am done with PT. Totally my fault for not checking / understanding medical coverage limit on my Car Insurance and having to rely on my healthcare coverage.

[lex137]

This is good post to help our members. I think my auto coverage is high, still have full coverage on my 98 POS! Need to look closer at the home owners insurance though?

[Sawin]

Back to the OP topic: Auto insurance liability.

Very good topic of discussion Irving. I take it from your comments you are an insurance agent and help folks manage the outcome of their traffic accidents?

I am not proud to admit it, but I have been with Progressive since I was in college, long before I knew anything about their liberal ways and actually before my own conservative ones were truly engrained.... I'm what they call an "Emerald" member, after graduating from Diamond last fall... whatever that means. I have what I think is a very good rate on 2 vehicles, but only hold a 50K property damage liability on each accident. Bodily injury is 50k per person, 100k total per accident.

In your experience, what is the worst scenario that you have actually seen occur to someone holding 50k property liability? I know we can theorize all sorts of bad situations, I'm just wondering what you have personally encountered on the job so far.

[stodg73]

I have full coverage on all my vehicles, plus a rider for hospitalization of $200 per visit to the ER and $1000 per day for ICU.

[kwando]

Thanks for posting, even before i was with allstate, i've always had 100/300/100. Is it possible to have too much coverage?

[osok-308]

My father-in-law is an insurance agent, so I've definitely heard this before, but it's a good bit of advice that should be followed.

[sniper7]

Thanks for posting, even before i was with allstate, i've always had 100/300/100 (tel:100/300/100). Is it possible to have too much coverage?

Yep, too much life insurance and the wrong person as your benefactor!!!!

[HoneyBadger]

That's great advice, but I'm not as well versed in that area. A lot of specific contents categories like Jewelry, guns, tools, etc top out at $2,000 unless a special rider is purchased. I've been hearing that a lot of people are underinsured on their contents coverage lately. This puts you in a pretty tough position if you have a total loss, or even just a large loss from a fire. Contents are tough because you don't really have a list of all the things you own. Just take a moment and try to make a quick mental list of every single item you have in the smallest room in your house. Now do that for your entire house. Oh you had a TV? What size? What brand? What model? A lot of us might know that info for their favorite stuff like the big TV, or the computer, but what about the microwave and the toaster? Heck I can't tell you a single brand of any appliance I even have, even the ones I've installed myself. It seems hokey, but it's not a bad idea to do a quick video inventory walk through of your house occasionally. I've never done that before, but it is so simple to do, I really have no excuse for not having done so.

Something I started doing last year after I saw several friends and co-workers lose their homes in the Black Forest fire: digitally document EVERYTHING. Take a few hours to make or acquire digital copies of all your important documents: driver's license, passports, social security cards, birth certificates, marriage certificate, other important IDs or documentation, etc. You can even go as far as to scan all your big ticket receipts so you have records of all of it for insurance. Then walk around your house with a digital camera and open every single drawer and cabinet and take a picture of EVERYTHING you own, including as much detail as possible, even serial numbers or product numbers if applicable. Go buy a couple of 32GB SD cards (or however big you need) and put it all on one SD card, then make a backup. Encrypt them and give the backup to a trusted family member or good friend to keep in their safe.

[TFOGGER]

37k was for the first hour....I spend 11 days in the hospital... final bill will be close to 250k when I am done with PT. Totally my fault for not checking / understanding medical coverage limit on my Car Insurance and having to rely on my healthcare coverage.

Yeah, most of that came from my health insurance as well, first 5K was from med pay on the bike insurance(basically covered loading me into the ambulance, but not the trip to the hospital[LOL]). How's your recovery coming along? I'm about 95% after a year and 3 months, dunno if my shoulder will ever be right.

[SSChameleon]

Stu, that's some good advice. Full Disclosure, I'm an insurance agent. From my experience I can say anyone who has state minimum coverage and thinks that's ok is like the FUD who has carries a Jimenez arms for self defense.

Liability is relatively cheap. If you really are not sure about your coverage find an agent who has been in the industry for a few years (this is a mass hire/mass fire industry, the weak and stupid wash out in the first three years) and have a review. If you think the guy (or gal) is trying to sell you a bunch of coverage you don't need, get a second opinion.

Last year I had a family with 16 year old girl who ran a stop sign and flipped an SUV with a 72 year old couple in it. We paid the policy limits for them. I had another client who was T-boned by someone texting through a stop light and woke up in Littleton Adventist after 20 days in a medically induced coma. The girl who hit him had state minimums and he went after the parents.

If you are on a budget, raise you deductible. It's far easier to write a $500 check for the higher deductible than the $50,000 check to an attorney or guy you hit.

[SSChameleon]

Also, great advice Honey Badger on taking photos of everything. After handling several theft claims I can say the best thing you can do is take a photo with your cell phone of every serial number TV, Computer, IPAD, and Guns (The NSA probably has the serial number for them, but they wont give them out after a loss) then email the photos to a yahoo or Gmail account. This will make the claims process faster, and it gives the Cops a chance to catch the bad guys. Without serial numbers, the cops really have no way to ever find your stuff.

[Dave_L]

Ill say it over and over but people still don't listen. Make time each year to sit down with your agent and review your policies. Talk about changes within the industry, changes within your household, etc. The agent can't keep tabs on every single customer but the agent can sit down with you, review your policies, make recommendations, etc.

So many people hate insurance that they strip their policy down to go as cheap as possible to "show the man". Ultimately, you only hurt yourself. Pay for the appropriate coverage and you'll be 10x's happier down the road.

[RblDiver]

Which would you consider more affordable, adding on more to your regular auto insurance policy, or getting an umbrella policy?

[SSChameleon]

Some companies offer a discount on auto for adding an umbrella, when that is the case the umbrella is the way to go.

[OtterbatHellcat]

I don't know much about auto insurance, but when CO. went no fault, I raised everything on my cars to 250/250/ 500 and have my deductible way high, $2000 or something like that. I didn't want anyone suing me and having to lose my home and stuff like that.

I know that I'm lacking on homeowner insurance though, but, selling the place soon so........I'll be more on top of quality insurance for my home in the future.

[<MADDOG>]

Great info guys.

I also will chime in with the home insurance bit: people who were affected by the forest fires here in C/S had quite a shock when it came coverage vs $ of rebuild. Especially in Black Forest.

[jerrymrc]

Thanks for posting, even before i was with allstate, i've always had 100/300/100. Is it possible to have too much coverage?

What I have carried for 20 years. Though these days I may want to raise that. I will say the whole "insurance" thing is starting to grate on me. Years ago you carried Ins to protect the odd occurrence.

The number of people that damn near live off it is staggering. I will not drag up the info but I think my last years cost for "Insurance" was about about $24K. With health running $18K of that.

[jhood001]

Which would you consider more affordable, adding on more to your regular auto insurance policy, or getting an umbrella policy?

I'm sure Stu can weigh in better, but I carry an umbrella policy with State Farm for that reason and for legal fees in the event of a defensive shooting or firearm related accident. I checked with them 3 different times to make sure the umbrella would actually cover such a scenario and at least with State Farm, it does.

And thanks a bunch for the post, Stu!

[Irving]

I don't sell, so I have no idea what stuff costs. Also,I handle more minor stuff, so I don't personally handle a lot of limits issues.

[Irving]

Good advice.

I'll throw in my $0.02 and say take a look at your home owners insurance coverage as well. When our house was robbed last year, we found out the hard way that the wife's jewelry was only covered up to $500. Who the fuck has less than $500 in jewelry?

Can't believe I forgot about this. Unscheduled items like jewelry and guns come with a cap, just like the above example. I believe the common cap on firearms is $2,000 if you do not have them scheduled. You guys don't know anyone with more than $2,000 worth of guns do you?

Scheduling is where you list each item on a separate endorsement. Call your agent and ask for more details. If you don't have an agent, get one you like and get to know them.

[jerrymrc]

Can't believe I forgot about this. Unscheduled items like jewelry and guns come with a cap, just like the above example. I believe the common cap on firearms is $2,000 if you do not have them scheduled. You guys don't know anyone with more than $2,000 worth of guns do you?

Scheduling is where you list each item on a separate endorsement. Call your agent and ask for more details. If you don't have an agent, get one you like and get to know them.

Yep. "sporting goods" are all lumped into one. I added a rider years ago.

[MrPrena]

Sadly, I am under -insured on everything.

[hatidua]

Also remember this people - insurance is wonderful until you need to use it.

A lot of people, me included, learned that first-hand last September...[Mad]

[Irving]

Just ran into something new recently. My insured was driving a vehicle insured by Progressive. Meaning that they were borrowing a friend's car. Insurance follows the vehicle, so when my insured was involved in a wreck, Progressive would be the insurance company handling the claim. Most policies state that if you are driving someone else's vehicle, your policy will provide excess coverage over all other collectible insurance. What that means is that if the vehicle you were driving turns out to not be insured, so no other collectable insurance, then your policy will step in and provide coverage based on whatever coverage you have.

In this case, the Progressive policy specifically states that if an unlisted driver is operating the vehicle, then the policy becomes secondary (excess) to any other collectable insurance. Since my policy is automatically excess, because we don't insure the vehicle, now there are two excess policies in effect. Basically it boils down to that my policy and the Progressive policy will spilt this claim, even though the Progressive policy has collision and liability coverage for the vehicle.
Progressive does this to save money so they aren't paying for the actions of a driver that is not a listed driver on the policy. This is something to be aware of, as if you have a policy with this wording, you may feel differently about letting people drive your vehicle. Similarly, you may be more way of borrowing someone else's vehicle as well.

This is the first time I've run into this situation and I thought I'd share. I've heard that Safeco has similar wording on some of their policies as well. Just a heads up.