There’s no other way to say it, carrying just state minimum for auto insurance will put you at risk of being an underinsured motorist — and will not properly protect you and your family’s finances if you’re at-fault in an accident. Going with just bare bones car insurance coverage required for your state means you will be on the hook and paying much more out of your own pocket if a major accident should happen.
Here are 4 ways to avoid being an underinsured motorist.
1. Go beyond the state minimum for bodily liability
Bodily injury liability insurance covers you as the car’s driver for any type of injury that you may cause someone else when you are behind the wheel. Don’t settle for your state minimum bodily injury liability coverage with this important protection. In Arizona the state minimum is $15,000 per person and $30,000 per incident of bodily injury coverage or $15,000/$30,000, drivers choosing just the state minimum for bodily injury liability could be on the hook for a lot of medical expenses if they should hurt somebody when they’re behind the wheel.
So, you’re probably wondering, “How much bodily injury liability coverage should you get?”. Insurance experts recommend carrying at least $100,000 per person and $300,000 per accident for bodily injury coverage. Otherwise, any additional cost from the accident comes out of your pocket. You’ll be doing the right thing to protect yourself and the other driver. So don’t skimp on this very important coverage. And increasing liability coverage to get the best auto insurance protection comes cheap. Consider the following, based on our comparative rater analysis of rates from up to six major insurers for nearly all AZ ZIP codes: The average cost for state minimum liability coverage is $532 per year. Increasing that coverage to $50,000/$100,000 averages only $571. So, you only pay another $39 a year by increasing your coverage. If you increase that to $100,000/$300,00, that average goes up to just $609 per year.
2. Get auto insurance coverage for property damage
Don’t forget about property damage liability coverage, which covers any damages you may cause with your car to someone else’s property or vehicle. Property damage liability minimum in Arizona is just $10,000. It would be hard to replace any newer vehicle with that low of a coverage limit.
3. Protect yourself against uninsured and underinsured drivers
This important auto insurance coverage protects you if an uninsured or underinsured driver is at fault in an accident and they don’t carry enough insurance to cover the damages you’ve sustained in the accident. This coverage also applies if you are victim of a hit-and-run collision or if you are hit as a pedestrian, according to the Insurance Information Institute. Uninsured drivers are everywhere. Nearly 30 million drivers in the US are uninsured (that’s nearly 13 percent).
4. Get enough coverage to protect your assets
Are you still wondering just how much insurance do I need? Are you worried that you may be underinsured somewhere with your auto insurance coverage? A good rule of thumb is to get enough auto insurance coverage to protect the total amount of your assets, such as your savings and investments and the value of your home. Have no doubt that your home could be at risk. If you are at fault in the accident and your insurance doesn’t cover the full amount of the damages, the other driver may sue you in court and a judgment against you could mean a lien on your house. Once you’ve protected your assets through adequate auto insurance, talk to your local independent insurance agent. They can run the rates of 10 to 15 companies and make sure you’re paying a fair premium for the proper protection your family needs.