I am sure that you have either had a trip to the hospital, or know someone who has gone to the hospital, that has received a ginormous bill in the mail afterwards. Texas auto insurance may not be able to cover every medical bill you incur in a lifetime, but it can help protect you and the drivers around you if the right coverage and limits are chosen.
In order to better understand why state minimum liability limits may not be the best fit for you, we first have to look at why the law is in place. People operating motor vehicles, have accidents, where they injure others and their property.
Our obligation is to restore, or indemnify, these people back to the status they lived at immediately prior to the accident. It became evident that most people did not have enough money in order to make these restorations. Insurance is a product designed to make sure we have at least the minimum coverage, in case we cause accidents.
Let’s discuss why the minimum Texas auto insurance liability coverage may not cut it for you.
Understanding Texas Auto Insurance Liability
Each state has a “state minimum” liability limit. The state will require all drivers to carry that minimum limit if they wish to operate a vehicle. The Texas auto insurance state minimum liability limit is 30/60/25.
The first number – “30” – represents the max bodily injury limit ($30,000) for one individual. The second number – “60” – represents the max limit for all persons injured, meaning the most the insurance company would pay out on a liability claim, for bodily injury, would be $60,000. The last number – “25” – represents the max limit the company will pay ($25,000) for property damage.
Now that you know what those numbers mean, we can delve into the reasons behind why we never advise our clients to carry state minimum limits.
Bodily Injury Limits
Any person in their right mind would feel a sense of obligation to take care of who they injured. To feel this sense of obligation is human nature, and we often want the ability to right our wrongs. In order to have the ability to protect these people we could potentially injure, or even kill by means of an auto accident, we need to carry high liability limits.
Let’s say for instance, you run a red light going 60 mph and t-bone a mini van. In the mini van, mother was driving her twins, and four other teammates, to soccer practice. All passengers incurred severe injuries and needed to go to the hospital. Each individual racks up at least $10,000 in emergency and medical expenses. There were 7 passengers, so the total would be $70,000 at the least.
In that situation, the total bodily injury limit would be exhausted, considering the max that the insurance company will pay is $60,000. Also, consider that not one of the passengers/drivers bills exceeded the $30,000 cap to an individual. In many cases we see that this limit is exhausted quickly with severe injuries, creating a new set of problems.
Property Damage Limits
We can take a look at the “property damage” limit now. Typically, $25,000 is the maximum that your Texas auto insurance company will pay if you damage another person’s property and you are found to be legally liable.
Just like everything in life, the price of vehicles are going up. More technology means more expensive parts on vehicles.
Think in terms of new vehicles, just rolling off the lot. We can begin to see that $25,000 is clearly not the most suitable limit if you were to hit a brand new Mercedes, F-350, BMW, or even a brand new Toyota Camry.
You may be asking yourself now, “What happens if I don’t carry high enough limits to cover the bodily injury or property damage that I cause?”
The courts can, and most likely will, attach a judgement to you, which is an official result of a lawsuit. A judgement gives the judgement creditor the right to collect from the judgement debtor (you in this scenario).
A judgement is a public record that will affect your credit reports, buying opportunities, and much more. The judgement will be intended to provide payment for injuries caused by you to another. Often times we see it is rare that insureds have the savings to pay the judgement attached.
If you aren’t able to atone the party you injured, they will likely have to pay their medical bills out of pocket. Given the hope they have health insurance, there are still deductibles and co pays that will apply to this person, causing financial burden in their life. If you ever have a judgement attached to you, it can be very difficult trying to make big purchases, like buying a house.
There are many reason why you want to carry high liability limits. Accident or not, it is our civil duty and responsibility to take care of those that are injured or killed due to our actions. Carrying high limits benefits not only the other party, but also you, by protecting your lifestyle.
Give us a call today to discuss what limits you are carrying and if they are sufficient for your needs.