Whether you drive a clunker or a luxury sedan, having an improperly insured vehicle on the road is asking for trouble. Of course, you want to have towing and car rental provisions, as well as coverage for physical damage for your vehicles, but the place that can really get you is your auto liability limits.
Auto Liability covers the costs of injured persons or property in case you are at fault in an accident. Once the limit in coverage is reached, you can be sued for any remaining damages. While the state of Illinois requires this type of insurance to be on your policy, state minimums are NOT enough.
These policies come with three numbers to know, for example a 25/50/25 policy.
The first number refers to the amount allotted for bodily injury per person ($25,000), the second is the amount of bodily injuries in total ($50,000) and the third is the amount for property damage to a third party or other vehicle ($25,000). While $25,000 or $50,000 may seem like a sufficient coverage, accidents including multiple vehicles or severe injuries can quickly exceed these amounts. I recommend a combined single limit of $300,000-$500,000.
Check your policies to make sure you aren’t in a risky situation.
Within the last few weeks a Compass Insurance Partners insured was stopped at a traffic light when he was rear-ended by a driver insured by a sub standard carrier with state minimum auto limits. That driver was then rear ended by a third car with 100/300/100 limits. Though he was not legally at fault, our was forced to turn in the claim his insurance after both the second and third cars’ insurance companies denied responsibility for his vehicle damage. Those insurance companies have been difficult to work with, not returning calls or responding to the adjuster. The damage to our client’s vehicle exceeds $6,500 and, while our carrier will subrogate against other insurance companies to try to get the full claim amount and deductible back, it may be a lengthy process.
By not having regulated insurance providers an accident with an uninsured or underinsured motorist could be disastrous. Not only do you not want to be in an accident with someone who is underinsured, but you don’t want to carry less auto liability coverage than you need.