Pitfalls of 'State Minimum Cover'

You have seen the comercials, you have heard the radio ads, and you have grown to love (or hate) the various spokes-characters. The tout the same thing- keeping you legal on the road for less. This may be the best option for some but if you are driving around with state minimum coverage, you are likely leaving yourself liable for a lot of headaches- physically and financially.

In Ohio, the state minimums are as follows:

In Ohio the required minimum for Bodily Injury Liability Coverage is currently $25,000 per person injured in any one accident and $50,000 for all persons injured in any one accident. The required minimum for Property Damage Liability Coverage is $25,000 for injury to or destruction of property of others in any one accident.

To find your own state’s minimum coverages, call a local agent or do a quick online search: {State} minimum auto insurance. If you are considering bare minimum car insurance, here are the needed facts you should know:

When bare minimum makes sense

If you are recovering from a recent bankruptcy, a college student, on a very tight budget living pay check to paycheck, or have little to no assets, then state minimum car insurance may be the only option that fits your budget.  This will allow you to stay legal on the road. However, if this is your situation, consider the following:      

  • Don’t get complacent. As your financial situation changes and hopefully improves, reconsider your auto insurance and see if you can afford to raise your limits.
  • Avoid risky situations. You cannot predict the unpredictable but you can still do your best to high risk situations.

You could be on the hook for a huge bill

If you’re involved in a wreck that injure another party, you insurance may kick in but with minimum coverage, you may exhaust your limits. For example a moderate to severe accident will likely reach costs off $100,000 or more. This would far surpass the Ohio state minimum limits of 25/50/25.

As the at-fault party, you may have to pay the costly fees of defending yourself and even liquefy your assets like your home or car until the debt is fully paid. This would also include the potential of having your wages garnished. It depends on your budget and lifestyle to determine is saving $10-$20 a month is worth the risk of losing so much.

Increase your limits without raising your bill

Insurance companies value mature and experienced drivers with a good driving record. If you fall into this category, finding better coverage may not cost you much more. If you still need to find lower rates, consider asking your agent if you can raise your deductible- out of pocket expenses- instead of lowering your limits. This is the perks of dealing with a local, trusted agent.

Full coverage doesn’t always protect you

Some people will elect to buy comprehensive and collision coverage in addition to the state minimum thinking that this will be enough. We’ll break this one down for you via bullet points.

  • Comprehensive covers losses from theft, flood, or fire, not collisions.
  • Collision coverage covers you in the event of colliding with another auto or object.
  • Liability coverage needs to be enough to protect your assets.    

If you cause an accident and injure the other party, it will be your liability coverage that will be need to pay out the damages.

Better policies offer more perks

When you buy state minimum auto insurance, you are getting exactly that. However, if you elect to purchase a policy that offers better coverage and costs more, the insurance provider will likely offer incentives to lower your bill. Here are a few of the perks that are currently out there:

  • Free roadside assistance
  • Good grades discount
  • Safe driving discount
  • Free or discounted rental car
  • Cheaper home or other insurance when bundling 

These options can provide more value and a better bang for your buck than a state minimum policy.

If this information was insightful or terrifying (because you currently carry state minimum car insurance), then give us a call! We’ll gladly review your policy at no cost.

 

Most Recent

What if you have a water back up in your basement?

By Jay Toole
April 10, 2019 Category: What If, Homeowners Policy, Flooding

Snapshot: Document everything that was removed from the basement in a detailed list. Remove carpet or other damaged flooring. Assess if further remediation is needed from a restoration company and contact your insurance agent. April showers may bring May flowers, but they could also bring some serious headaches. Common in old homes and homes built at low points relative to storm drains can suffer from basement flooding and water back up when a storm is heavy enough. This can mean water flooding the basement from drains or even sewage from the toilet. In the former case, the water may not have human waste but still be dirty enough to ruin your carpet, drywall, wood stairs, and household items that can absorb liquid. We have dealt with this personally and would gladly impart our wisdom onto you. Be prepared prior to the upcoming storms Keep electronics, shoes, towels, stuffed animals, and other items that can absorb water on higher shelves or in sealed, plastic totes. Totes without

Not All Auto Policies are Created Equal - 3 Things to Ask Your Agent

By Jay Toole
April 04, 2019 Category: Auto Insurance, Limits, Ask Your Agent

Your softball buddies ask you out for a burger after the season opener. You think to yourself, I ran around the bases at least 3 times. Ive earned it. You jump in the co-pilot seat of your teammates car and motor on to the downtown strip. In the distance you see the familiar sign of your favorite pub and can just taste the flamed burger that awaits. And just as you think your celebration is ready to commence, your classless teammate turns into the drive-thru at the nationwide burger joint that we will call PacDonalds. You feel crushed and a bit queasy. That second feeling may be from the food that has yet to hit your stomach. This fast food lesson can apply to almost any aspect of your life but as insurance nerds, we thought it gave a good representation how not all insurance policies are created equal. Check out these 3 questions you should be asking your agent about your auto policy. What are my limits? You hear the term state minimum often from a certain gecko, caveman, or general

Getting to Know GTG: Josh Dykstra the Boat Guy

By Jay Toole
February 13, 2019 Category: Boat Insurance, Marina Insurance, Eriesponsible

Towering over everyone in the office at 6 foot 5 inches, Josh is our go-to guy for files on the top shelf or if you need a really high, high-five. Being our marina and boat insurance specialist, you can usually find him on Lake Erie with his wife and son, catching as much Cleveland sunshine as possible before Winter sets in. Recently, Joshs passion for our Great Lake moved him to starting a non-profit dedicated to protecting and preserving this resource. The aptly named Eriesponsible has a mission to take steps now to preserve the health of Lake Erie for future generations. They take a common sense and economically viable approach that anyone can be a part of. From simple trash pick up as we boat or enjoy a beach front park to being more careful and using proper procedures when refueling your boat, Eriesponsible is dedicated to leading the charge. They will be offering educational programs, selling ecofriendly boating equipment, and doing their part to protect the lake for generations

CONTACTS

  • Address: 5194 Richmond Rd, Bedford Heights OH 44146
  • Toll-Free: 440-349-3670
  • Fax: 440-349-3674
  • Email: info@insureohio.com

Insure Financial Services © , Powered by Virteom