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
If you cause a car accident, your liability could extend far beyond damages to property. In many cases, collisions involve injured victims who need medical attention due to the accident. If you are sued, you could be responsible for compensatory damages, as well as punitive damages if a jury determines you were negligent in causing the accident. Bodily injury liability insurance is designed to protect you against financial responsibility, protecting your income, savings, and other assets against expensive lawsuits.
Here in Wisconsin, bodily injury liability is mandatory coverage, although the minimum limits required by the state are not enough to minimize your risk vulnerability in an accident. Here at Smith Insurance and Financial Services, we recommend that our Big Bend customers opt for higher limits that will better cover things like medical bills, lost wages, emotional distress awards, and more.
Split Limits vs. Combined Single Limit (CSL)
You may see the bodily injury liability coverage on your insurance policy represented in one of two ways: as a combined single limit (CSL) or a split limit. The combined single limit will include a single number, which expresses in thousands the maximum amount of coverage your policy pays for all injury liability combined. A 300 CSL, for example, pays up to $300,000 in total bodily injury liability regardless of how many victims are injured.
Split limits are listed by two different numbers on your policy. If you have a split limit, the insurance company limits the maximum available coverage for the accident, as well as per injured individual. A 250/500 split limit indicates coverage of up to $250,000 per individual injured in an accident, with a maximum of $500,000 total bodily injury liability coverage available for all injured parties combined.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
There are many uninsured drivers on the road, and far more who drive with liability limits that are too low. If one of these drivers hit you, how do you ensure your medical needs are met? Here at Smith Insurance and Financial Services, we believe that uninsured motorist (UI) and underinsured motorist (UIM) protection are two of the most important types of coverage you can have on your policy. They protect you and your passengers against the negligence of others, helping to fill in gaps left behind by uninsured drivers and drivers with inadequate coverage.
Money to Help with the Little Things
If you have ever been in a car accident, you know it can take a week or more for car repairs. How much will it cost you to pay for a rental car during that time? If you need medical attention, could you afford the upfront cost of health insurance deductibles and co-pays? Add in the cost of towing your vehicle after the accident, and it is easy to see how quickly the ‘little things’ can add up to a major financial burden. Fortunately, additional coverage is available to provide financial relief with towing, rental car, and medical payments coverage.
Beyond Car Insurance
Having excellent car insurance coverage is the first step in protecting your income and assets against liability in a car accident, but it may not be enough in some cases. Occasionally, accidents happen that result in million-dollar lawsuits and result in total financial devastation for at-fault drivers. If you injure and permanently disable a young physician, for example, how will you afford millions of dollars in long-term medical expenses and lost future wages?
To better protect your income and assets, we recommend purchasing an umbrella policy that can supplement the primary coverage on your car insurance policy. Umbrella insurance typically extends your liability protection by $1 million or more and is available at very affordable prices. For more information or to find out if umbrella insurance could be right for you, contact our office today.