Why You May Need More than the Minimum Auto Insurance

According to the Indiana Department of Insurance, Indiana is a compulsory auto insurance state where you must have a minimum 25/50/10 liability policy. The “25” means a maximum medical coverage of $25,000 in case of bodily injury to one person in the other vehicle. The “50” depicts a $50,000 combined medical coverage for the entire accident. Likewise, the “10” represents the total amount of property damage to the other vehicle, which is $10,000.


How it Works


Let’s say, for example, one person in the car you hit when you ran a red light sustained medical expenses of $40,000, while another had $10,000. The car valued at $18,000 was totaled. Even though you had the minimum auto insurance required by Indiana law, you could still owe the other party $23,000.


Even though the total medical bill was at your max of $50,000, one person’s bill was $15,000 above the maximum per person limit of $25,000, and the other vehicle’s damage was more than the $10,000 upper limit of coverage by your insurance company. Therefore, the other driver could bring a civil suit against you for the $23,000 that your insurance company will not cover. The average value of a car on America’s highways is more than $20,000.


Getting more for Less


You could avoid this liability by buying higher increments of coverage. You can most likely get twice as much coverage, 50/100/20 without paying that much more. Ask your agent and then, shop around. Of course, how much you pay for auto insurance depends on a variety of factors, such as age, gender, type of car, etc.

Males aged 18-24 usually pay the most for auto insurance. After age 25, most policy holders see a decline of around 25 percent until age 65. So, you should check with the agent for full details about how much you pay and why. To get the best deal on auto insurance Merrillville IN, speak to an auto insurance agent about increased coverage and UM/UIM insurance.


Uninsured & Underinsured Motorist (UM/UIM) Coverage


Another option is UM/UIM coverage. Nationwide, nearly one in eight drivers are uninsured, and one in four are underinsured, says the National Association of Insurance Commissioners (NAIC). With the high cost of medical expenses, it is understandable that many drivers are underinsured. Medical expenses can reach into the millions.

Nowadays, in Indiana, you must decline UM/UIM coverage in writing. Usually, UM/UIM is done as a rider and does not add that much to your premium. When an uninsured or underinsured driver causes an accident where you are injured, or your car is damaged, you can get compensation for medical bills, loss of income, and any damages or injury-related expenses only by filing a civil suit.


The biggest problem with uninsured drivers is that they have no money or very little. Therefore, taking them to civil court will likely just cost you more money for legal fees. We are not saying you shouldn’t because if they do come into money, you will have a claim on it. Then, you can get whatever the court ordered them to pay you if they hit the lottery or get an inheritance.Your best option is to carry UM/UIM auto insurance, so your insurance company will pay whatever theirs doesn’t, depending on your coverage. The minimum for Indiana is:

  • Injury by an uninsured motorist, $25,000 & $50,000 bodily injury,
  • underinsured motorist, $50,000 bodily injury, and
  • property damage $25,000


Those figures are the minimum the insurance company is required to offer by law. You can always buy more coverage. Remember, insurance is meant to protect you and your family from catastrophic financial hardship.

 

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