Auto insurance liability limits?
March 28, 2013 7:44 AM   Subscribe

I'm evaluating my insurance coverage, and I'm confused a bit on auto insurance liability. It seems like a typical liability policy is $100k per person for bodily injury. From the tales of medical bills I've heard, it seems like a bad accident could pretty easily cause bills far exceeding that. Even if I increase it to $300k or $500k, if the actual costs are higher than that, it could pretty easily wipe out all my assets. What really happens in accident cases like that? Do they generally just settle for the insurance limits?

Related question: Uninsured / underinsured motorist coverage: this is covering damage to my car and and injuries in my car if the other person doesn't have insurance, correct? Wouldn't my medical coverage generally cover the injury part? It's not like my medical insurer is going to sue me for the money. And the car damage part seems like it would be pretty low. So why do people recommend getting this coverage at the same level as the liability?
posted by smackfu to Work & Money (7 answers total) 2 users marked this as a favorite
Look into an umbrella policy. My car insurance offers a rider that starts at the top end of the auto policy, and it covers the big bucks (i.e., starts at $300K and then covers the next $1M, $5M, $10M--whatever). It's not terribly expensive for the amount of coverage you get (maybe $300 or something for a million dollars, so you'd be covered up to $1.3 million between the umbrella and the auto policy).

I think there's a difference between the uninsured motorist policy and the bodily injury for you and passengers in the event of a collision with an uninsured motorist. I have the statutory minimum for bodily injury, given that I have health insurance from work. It's my understanding that people recommend matching your regular policy because if an uninsured motorist hits you and you hit someone else, that third person is going to sue you, because you have insurance. You're essentially doubling up on coverage.

The umbrella policy will set your coverage levels for your other liability insurance (otherwise you'd have a gap--i.e., auto liability to $200K, and then you are entirely out of pocket until $300K, and then the umbrella would cover you to $1.3M).

I'm not your insurance Svengali--talk to your insurance rep.
posted by Admiral Haddock at 8:01 AM on March 28, 2013

As we are not your lawyers or your insurance agents, I think your best bet would be to call your agent to make sure all your questions are answered in relation to your specific policy.

But to clear up some of the terms:

For the $100k per person for bodily injury, policies also typically offer extraordinary medical benefits (EMB) to cover things above the $100k amount.

Uninsured & underinsured motorist coverage is covering things that another's insurance would be required to cover if they were at fault and not you.
posted by sgo at 8:04 AM on March 28, 2013

About 15 years ago in Canada insurance companies paid out $100k for a fatality and about $1 Million for parapelgia and $1.5 Million for Quadrapelegia. That was in a no fault insurance environment.

Just to give you a sense of possible scale for automotive liabilities.
posted by srboisvert at 8:27 AM on March 28, 2013

Seconding an umbrella policy. In my experience, they don't cost that much more than the standard 100k liability policy, and if you have significant assets, like a house, the increased peace of mind is worth it.
posted by misha at 9:23 AM on March 28, 2013

Adding a $1M umbrella policy on top of our auto and homeowners insurance raised our monthly premium $20, through Amica. It would kick in after we hit the liability limits on either policy.
posted by bizwank at 11:18 AM on March 28, 2013

We also have an umbrella.

But as to medical, I recently found out that my employer provided health insurance would pay medical expenses if I was injured in a car accident. This resulted in premium savings for us.
posted by dpx.mfx at 11:35 AM on March 28, 2013

Response by poster: Thanks, I will look into an umbrella policy for peace of mind. Last time I tried to research one, I ran into trouble since the umbrella policy holder wants to hold the car and rental/homeowners insurance policies too, and that wasn't possible at the time, but my circumstances have changed.
posted by smackfu at 5:42 AM on April 1, 2013

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