What Do You Mean I’m NOT “Fully Covered”?

This past week, one of our clients received a letter in the mail from their auto insurance provider that the recent accident in which they were involved and deemed to be at fault may not provide them enough coverage.  Essentially, the letter was letting them know that “hey you might want to consult some legal counsel because our obligation to defend you and pay for your mistake is about to end”. It’s a letter that nobody wants to receive, yet so many of us are vulnerable and don’t even realize it.

When asked what level of coverage they carry, 9/10 Americans respond with either “Full Coverage” or “Liability Only” and they do not understand that “Full Coverage” could potentially be leaving them grossly underinsured. In reality, “Full Coverage” means that if your car gets damaged it will be repaired. However, “Full Coverage” does not dictate how much coverage you have in the event that someone gets hurt or their vehicle is damaged in an accident when you are considered to be at fault. For example, there are usually four levels of liability coverage limits to choose from:

$30,000 per person injured maximum/ $60,000 for all injuries maximum / $25,000 property damage
$50,000 per person injured maximum/ $100,000 for all injuries maximum / $50,000 property damage
$100,000 per person injured maximum/ $300,000 for all injuries maximum / $100,000 property damage
$250,000 per person injured maximum/ $500,000 for all injuries maximum / $100,000 property damage

You can carry any one of these split liability limits and still carry “Full Coverage”. However, when someone in front of you traveling 70 mph slams on the brakes and you rear end them, how much is your policy going to pay? If it isn’t enough, you will be held personally liable which means your assets are at risk. Typically, the cost difference between carrying low limits and high limits is small, sometimes as little as $9 per month. It’s extremely important that you review your liability limits and properly protect yourself. We go to work everyday to earn money for our families and invest it or save it to secure our financial future. Don’t you want to protect that?

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