Car Insurance: How much coverage do you need?

[beastykato]

Well, we had some nice big arguments over home and medical insurance.  So, I figured I'd bring this up too =).

I do have a legitimate question though.  How much car insurance do you all have?  Do you increase your minimum coverage in relation to your net worth? 

In the near future the gf will be buying a new cheap car $4000 or less to get to work in. 

So, I got to thinking about whether the minimum coverage is really a good idea in our situation.  In PA the minimum coverage is 15/30/5.  $15,000 for bodily injury seems incredibly low and in some cases one night in a hospital could exceed that!  Of course, the 30k for total accident and 5k for property also seem very low as well.   

Given that many of us have assets for people to come after when these limits are exceeded what sort of coverage do you guys carry?

[englishteacheralex]

The rule for insurance is that you insure for things that could bankrupt you and self insure for everything else.

We drive cars worth less than $3k, so we don't have collision or comprehensive because we can afford to replace our cars.

We can't afford to be sued for liabilities or to pay potentially enormous medical bills in the case of being hit by an uninsured or underinsured driver.

So we carry the max that Geico will give us for liability--$500k. This is well worth the cost. For Mustachians, the cars don't need the insurance (we have plenty of assets to deal with whatever happens to the cars). The people do.

[TomTX]

We recently upped auto liability to $250k per person $500k per incident.

It added $107 per year over the minimum liability for 2 cars.

We also upped liability on homeowners insurance from the minimum to $500k

It added $7 per year. Yes, seven bucks.

Well worth it, IMO. I have assets to protect. Might as well have a deep pockets insurance company with real skin in the game if I ever get sued.

[scullingby]

I opt for the higher liability limits available for two reasons.  One, to protect my current and future earnings.  Two, to ensure a person seriously and permanently injured due to my fault could receive the care to which they are entitled. 

[Chris22]

My car insurance limits are not especially high because I have an umbrella policy that kicks in from, I believe, $300k to $2M.

[TheInsuranceMan]

We recently upped auto liability to $250k per person $500k per incident.

It added $107 per year over the minimum liability for 2 cars.

We also upped liability on homeowners insurance from the minimum to $500k

It added $7 per year. Yes, seven bucks.

Well worth it, IMO. I have assets to protect. Might as well have a deep pockets insurance company with real skin in the game if I ever get sued.

This.  So much this.
Liability in CHEAP to increase.  Carrying state minimum's is a terrible idea for anyone, let alone most MMMers who have, or are working towards having a substanial net worth.  At a minimum, carry 100k per person, 300k per accident, or 300k combined single limit.  I'd recommend 250/500, which is what I carry.  I've ran quotes on this before on these posts, but I can't find them off hand.  I believe when I quote reducing my liability from 250/500 to Iowa state minimums, it wasn't saving me $150 a year.  $150 a year is CHEAP for an extra 200k+ of liability insurance.

It just isn't worth the minimal savings to carry the lower limits.  Don't do it, and believe me, you'll regret it the minute you get into a moderately severe accident when you are at fault, and you get the stress worrying about whether your policy limits are high enough.  Because, guess what, if the bills exceed your limits, YOU are personally on the hook for the remaining bills.  Not fun.

[KarefulKactus15]

I agree that minimum is a terrible idea for someone trying to build wealth.

At the MINIMUM I think everyone should have the amount of auto insurance required for an umbrella policy.   Somewhere around 300/500? 



And then an umbrella policy to 1-2 million depending on earnings. 

But state minimum is penny wise pound foolish.