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Auto Insurance Limits for a Newbee
Old 02-06-2010, 08:22 PM   #1
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Auto Insurance Limits for a Newbee

This coming fall I will be starting my first full-time position and will have to buy my own auto insurance. I am currently covered under my parent's policy which has the highest limits (something like 500k) plus an umbrella policy.

As someone just starting out with ~10k in savings and a car worth about 10k to my name do I need the same policy limits for myself or would something lower be more appropriate?

If it makes any difference my salary will be about 50k but expect to be significantly higher in the future.

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Old 02-07-2010, 02:17 PM   #2
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I think you should do just fine with the required limits of liability by your state at this point in your life.

However, for additional peace of mind, you can have them give you a quote on higher liability coverage. If it's not too expensive, you may want to consider it.

There's no need to complicate, our time is short..
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Old 02-08-2010, 12:38 PM   #3
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The last time I checked, the minimum property damage coverage in my state was $25k. There are a lot of cars out there that can be totaled for more than $25k. The injury limits are low, too. I got quotes from my agent, and doubling my coverage didn't cost much extra.

I'm the farthest thing from a legal expert, but a court judgment can be assesed against future earnings and assets, yes? I definitely want enough coverage to handle totaling a car and putting a couple of people through some hospitalization.

Side note: I was going to get a $1000 deductible, but the difference in premiums for a $500 deductible were tiny in my case, so I have a $500 deductible.
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Old 02-08-2010, 12:56 PM   #4
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There are also state laws to consider, such as:

* Can your wages be garnished by lawsuits in your state if there is an award that's greater than your assets and insured liability coverage?

* Can your homesteaded residence, retirement plans, insurance and pensions be seized by judgments against you in your home state?

If "yes" to either of these you probably want considerably more liability than your assets would cover.
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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