Auto Limits - Is The Minimum Property Damage Enough?

Did you know Maine recently held a public hearing on increasing the minimum property damage limit from $25,000 to $50,000? Ultimately the bill was withdrawn, but it makes you think about how much coverage is $25,000 in the long run.

Even without the increased limit, Maine has one of the highest minimum required limits for auto insurance. You can see a quick comparison chart by NerdWallet.com listing each state’s minimum limits.

But are these limits really enough?

Let’s look at some quick facts and statistics:

·         Maine law requires a minimum limit of $50,000 bodily injury per person, $100,000 bodily injury per accident and $25,000 for property damage.

·         The average cost of a new vehicle today is over $34,000.1 Even though losses are settled on Actual Cash Value, factoring in deprecation; you could still be responsible for some damages out of your own pocket if the $25,000 limit doesn’t cover the value of the vehicle you caused damage to.

·         Motor Vehicle crashes are the leading cause of death in the United States, with over 100 people dying each day.2

·         Bodily Injury limits cover not only actual medical expenses, but also pain and suffering and can include lost wages.

·         In 2013 the average claim for bodily injury was $15,443 for car accidents. While for the most severe accidents, mean medical expenses were $503,638.3

Even just these few numbers can make you second guess if the minimum limits are really enough? Agents need to talk to their clients to make sure they understand the true costs and limitations of the policy. In many cases, increasing the basic limits will not cost much up front, and everyone will see the true savings in the event of a covered claim.

As a driver you should want to be protected to save your assets in the event of a loss. As an agent, you should always discuss and offer higher limits.

1.     https://www.financialsamurai.com/average-new-car-price/

2.     https://www.cdc.gov/motorvehiclesafety/costs/index.html 3.     https://gdallashorton.com/how-much-do-auto-accidents-cost/