Avoid Getting Minimums When You Purchase Auto Insurance

It’s a law in Utah: You must have car insurance when you drive. But what kind of insurance should you purchase?

If you are like many people who want to keep their monthly bills to a minimum, you might think that getting a minimum policy makes the most sense. When you look at what you risk by just getting a minimum policy, however, you will likely change your mind and spend a little extra for a policy that can better protect you and your family.

What the Minimum Utah Auto Policy Gets You. In Utah, the minimum policy that you can get comes with only $25,000 in coverage for one person or $65,000 total for all persons injured in the incident. This is sometimes referred to as a 25/65 policy.

Minimum Property Damage Coverage. When your property damage coverage component matches the minimum policy of $25,000, then the most your carrier will pay out if you cause a crash is $25,000. This insurance helps protect other drivers on the road from mistakes you might make in driving safely. But what if you get distracted and cause $50,000 in damage to a new Mercedes? You can see right away that having a minimum policy could leave you significantly exposed when the other driver’s insurance company comes after you for another $25,000 to make them whole after your insurance pays their $25,000 policy limit.  And you can bet that they will!

Minimum Uninsured Benefits. Most understand that they want uninsured motorist coverage on their car when they drive. This protects you from those times when other drivers drive around without insurance. But is $25,000 enough to cover you if the at fault driver that pounds you doesn’t have insurance? I guess that depends on how lucky you are feeling.

Consider the scenario where someone without insurance runs a red light at high speed and smashes your driver’s door where you’re sitting. The injuries from this kind of crash can be severe. And in some cases, fatal. What if you’re spouse or child are driving that car and are seriously injured? You can see that a minimum policy is not going to go very far in providing coverage in this situation.

Minimum Underinsured Benefits. Similar to uninsured motorist coverage is insurance that kicks in when the other driver doesn’t carry enough insurance. So consider the same scenario as above, but this time, the other driver has a minimum policy. So now there is a total of $50,000 in coverage. When you consider a full workup and overnight stay in the emergency room can cost over $30,000, you can hopefully see that having that minimum $25,000 underinsured buffer is just not going to cut it.

Beware of the Uninsured and Underinsured Waiver. To make matters worse, unscrupulous insurance companies, who prey on those looking for lowest possible car insurance payment, may ask their customers to “waive” their uninsured and underinsured coverage so their monthly insurance premium is as low as possible. Getting the lowest possible payment can be tempting, particularly to those who may not understand exactly what they are giving up.

Having seen the repercussions of what happens when people drive around with a minimum policy, I’m here to tell you that it’s worth it to increase your policy right away and not put it off. A larger policy, which does not cost that much more, will give you and your family that extra level of protection and assurance you want when you get on the road with a bunch of strangers.

Others Auto Policy Amounts That Are Available. Generally speaking, the next level above the minimum policy in Utah is 50/100, followed by a 100/300 and a 250/500 policy. There are custom policies available, as are larger “umbrella” policies which can provide a blanket of $1,000,000 per crash.

Increasing Your Policy to Increase Peace of Mind. It doesn’t cost much to jump up a tier or two. If you are at the minimum, though, you should seriously consider increasing your policy as soon as you can as you are putting yourself and others at risk by driving around with minimum coverage. I recommend to my clients that they carry at least a 100/300 policy, $100,000 maximum per person, and $300,000 maximum for all persons hurt.

How to Increase Your Limits. Increasing your limits may be as simple as logging in to your insurance account and increasing it online. Many of these modules will show you in real time how much the additional coverage will cost. Or you can simply call your insurance agent and get a quote from them on what the price difference will be. Once you increase your coverage, the higher limits should be available to you immediately. Check with your agent though, as insurance policy terms will vary.

Bottom line, increasing your insurance coverage is a way to protect yourself, your family, and others from the unexpected expenses that come when the unexpected happens out on the roads.

Ron Kramer practices personal injury in West Jordan and throughout the state of Utah.