Author Topic: Auto insurance coverage when you have few assets  (Read 342 times)

RusticBohemian

  • 5 O'Clock Shadow
  • *
  • Posts: 60
Auto insurance coverage when you have few assets
« on: November 13, 2018, 12:17:26 PM »
I've got a question about auto insurance with a low asset situation.

I've got about $15k in money in the bank, and roughly 3k more in taxable investments. My car was purchased used for $3,600 earlier this year. All the rest of my money is in either a regular or Roth IRA. From what I understand, IRAs are protected from creditors by Texas state law.

I'm single, and don't own my home, so outside of my retirement savings, my net assets are quite low.

I'm looking to get the best deal possible for auto insurance.

I'm wondering what sort of insurance minimums I should get.

The minimum under Texas state law is $60,000 per accident/ $30,000 per claimant. Since my assets are under this limit, should I bother to get more?

For personal injury protection from an accident, it looks like I can choose from $2.5k, $5, 10k, or 25k.

There's also "Medical expenses," from a non accident occurring while you're getting into your car or in the car but not driving or occurring without an accident: 2.5k, 5k, or 10k.

Property Damage Liability (for others, if I'm at fault) for $25k, $50, or $100k

There's also uninsured motorist bodily injury (in case an uninsured motorist hits me and they are at fault), with various coverage options.

How would you approach this in my situation?
« Last Edit: November 13, 2018, 01:12:00 PM by RusticBohemian »

seattlecyclone

  • Magnum Stache
  • ******
  • Posts: 4813
  • Age: 34
  • Location: Seattle, WA
Re: Auto insurance coverage when you have few assets
« Reply #1 on: November 13, 2018, 12:35:52 PM »
The minimum liability limits are absurdly low. They're fine if you rear-end a used Toyota at 10 MPH and nobody is hurt, but if there's any sort of expensive car or injury involved your assets are toast. If you truly have very little to your name outside of retirement accounts you may be comfortable risking bankruptcy for a lower insurance payment. Once you get some savings this becomes much less of a worthwhile trade.