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
In addition to property damage liability, you also need coverage on your insurance policy that compensates victims for any injuries you may cause in a car accident. Known as bodily injury liability insurance, this coverage protects you against expensive lawsuits for victim medical bills, lost wages, emotional distress, and more. It will not matter if you were totally or partially at-fault, or if you caused the accident due to circumstances beyond your control, such as a blown tire. What matters is that the accident happened, and you are responsible. However, if you exhibit negligence in an accident, such as texting behind the wheel or drinking before driving, you may also be subject to punitive damages in addition to compensatory damages.
All drivers in Green Bay and throughout Wisconsin must purchase bodily injury liability insurance, although the minimum limits required by the state are far too low to provide adequate coverage in a major collision. A single victim’s medical bills could easily total tens or even hundreds of thousands of dollars. That is why we here at Pagel & Associates Insurance Agency recommend purchasing high-limit bodily injury liability protection to better shield your income and assets against a major liability.
Split Limits vs. Combined Single Limit (CSL)
Bodily injury liability insurance is covered by either a combined single limit (CSL) or a split limit. A CSL provides one flat coverage amount with no individual limits. A 300 CSL, for example, provides up to $300,000 in total bodily injury liability coverage per accident. Split limits differ slightly from combined single limits. They still offer a total maximum bodily injury limit per accident, but they also impose a cap on the amount of coverage available per individual. A 250/500 split limit, for example, would cover up to $250,000 per injured victim with a maximum of $500,000 in total bodily injury liability available for all victims combined in an accident.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
Despite laws requiring drivers to have liability insurance, some refuse to comply. If an uninsured driver hits you, you could face difficulty recovering compensation for your injuries. Uninsured motorist insurance (UI) covers injuries to you and your passengers if an uninsured driver hits you. We also recommend adding underinsured motorist protection (UIM), which helps fill in coverage gaps when a driver injures you with liability limits that are too low to cover your losses.
Money to Help with the Little Things
Small expenses can add up to big financial burdens after a collision – even if you have coverage for damages to your personal vehicle and liability. There are towing charges, rental car fees, co-pays, and health insurance deductibles to pay, all of which may come out of your pocket if you are not adequately insured. Here at Pagel & Associates Insurance, we can help to enhance your coverage with medical payments, towing coverage, rental car reimbursement, and more.
Beyond Car Insurance
Lastly, we recommend reviewing your liability coverage needs to determine if a supplemental policy could better protect your income and financial future. In extreme cases, major collisions can result in traumatic injuries that result in million-dollar lawsuits. Even a maximum of $500,000 in liability may not be enough to cover the damages, leaving you with a major debt that could cause total financial ruin. In these cases, an umbrella policy could provide the extended liability protection you need to protect your income and assets against expensive litigation.
Umbrella policies are secondary to your primary coverage, providing payment only once you exhaust the limits on your car insurance liability. An umbrella policy will typically extend your liability protection by at least $1 million, although much higher limits are available to protect your financial interests. Contact our office for more information about umbrella insurance and how this affordable coverage could play an important role in your insurance portfolio.