Auto Liability Coverage
As we begin, please pay attention to the fact that is specific to New York State. While every state has their own minimum coverage, today I am going to discuss what New York’s is and why it might not be adequate coverage to protect you and your assets.
New York State’s minimum automobile liability coverage is broken down like this.
$25,000 per person
$50,000 per accident
$10,000 in property damage
Bodily Injury and Uninsured Motorist Liability Coverage both carry the same minimum of $25,000/$50,000. The first limit is the maximum they will pay on a per person basis and the second limit is the total they will cover and protect on a per accident basis.
Property Damage is the coverage protection that will pay for the damage you caused to a fixed or moving object. This includes other vehicles, fixed property, or objects like street signs or guardrails.
In order to legally have license plates on a vehicle and drive, you need to carry at least this coverage but as a trusted insurance professional I am highly recommending not carrying coverage this low.
Why it is a bad idea
As I am writing this, it is currently the year 2020 and the cost of everything is significantly higher now than when these minimum limits were created.
Auto Liability Coverage is meant to protect you and your families assets in the event of a claim. If you do not carry enough Liability protection, you will be held responsible of paying what your limits do not cover. Having low coverage puts you and your family at great risk of having to pay out of pocket or put things like your house, future income, of life savings at jeopardy.
Medical expenses are constantly rising. your bodily injury liability limits will protect you in the event the accident you have caused injuries to another person. After your insurance limits are maxed out, you will be responsible for the difference between what a judge rewards and what coverage limits you have.
Property damage limits cover the damage to other vehicles or fixed property. $10,000 Limit might not even repair an 8 year old vehicle let alone a new vehicle or multiple vehicles.
As you might see now it is obvious that you should not have this low of coverage because in the event there is an accident you will be at a great risk of having to pay out of your pocket.
There are a few issues with this.
- The state of New York still allows drivers to carry this coverage. The insurance industry has been trying to get the state to increase the minimum coverage.
- The lack of education that insurance carriers or other agents provide to the consumer. It is just not realistic to expect every insurance consumer to understand the in’s and out’s of the insurance contract. It is why we need more information to be easily presented to them and if not having agents and carriers refusing to write coverage this low.
Until we see either of these things change, we will continue to see around 40% of the driver’s on the road that are carrying minimum auto liability coverage.
Make sure you are reviewing your current car insurance policies and understanding what each coverage limit means. Review your policies with an independent insurance agent who can provide options for you and make sure you are protected.
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