This post is part two of the blog post that answers the question “How much car insurance is enough?”
Compensation for Harm You Cause Others
How much can a victim’s injuries cost you after an accident? The answer is complicated since liability damages can include much more than just medical bills. There are also ongoing rehabilitative costs, lost wages, emotional distress compensation, and sometimes even punitive damages to pay. Bodily injury liability insurance can cover the costs, but only up to the limits of your policy. Wisconsin imposes a minimum coverage limit, but it is too low to provide adequate coverage for a major claim.
Here at Heinen Insurance, we recommend that our customers purchase high-limit liability insurance to protect against potential lawsuits. As a driver, you remain responsible for any damages that exceed the limits on your liability insurance – even if it means dipping into your savings or making payments from future income to satisfy the claim.
Split Limits vs. Combined Single Limit (CSL)
There are two types of limits for bodily injury liability – combined single limit and split limit. A combined single limit (CSL) is the maximum amount of liability coverage available per accident. If your insurance policy shows a 300 CSL, for example, you are covered for up to $300,000 of injury liability per accident. A split limit puts caps on the amount of coverage available per individual, as well as per accident. A 250/500 split, for example, provides up to $250,000 of individual bodily injury liability coverage and up to $500,000 of total coverage for all victims combined per accident.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
More than 11 percent of Wisconsin drivers were uninsured in 2012. If you or your passengers are injured in a car accident, there is a more than 1 in 10 chance it will be the fault of an uninsured driver. Recovering accident-related damages from an uninsured driver could be a challenging and painstaking process. Uninsured motorist coverage (UI) helps ensure you and your passengers are covered for injuries caused by a hit-and-run or uninsured driver. We also recommend underinsured motorist coverage (UIM), which helps fill in gaps left by at-fault drivers with too little coverage.
Money to Help with the Little Things
Deductibles are not the only expenses you might face after a collision. There may also be towing charges, rental car fees, doctor’s office co-pays, and health insurance deductibles to pay. All of these expenses can add up quickly if you are forced to pay them out-of-pocket. Why worry about the ‘small’ things when your car insurance can cover the costs? Talk to an agent here at Heinen Insurance about adding coverage for the ‘little things.’
Beyond Car Insurance
You already know how important it is to maintain high limits for your liability coverage. In most cases, these are enough to pay for any damages you are responsible for after an accident. Some collisions, however, result in much higher financial responsibility. If you face a million-dollar lawsuit with only $500,000 of bodily injury liability coverage, how will you pay for the remaining damages?
Umbrella insurance protects your savings accounts, income, and assets against liquidation and seizure after a major lawsuit. It provides secondary coverage to your car insurance liability once you have exhausted the limits of your primary insurance. Most umbrella policies extend your liability protection by at least $1 million, although higher limits are available up to $6 million. Talk to one of our helpful team members for more information about umbrella insurance and whether it could be right for you.