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Car Insurance Liability
Old 07-12-2014, 11:31 AM   #1
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Car Insurance Liability

I am sure I am the only one here who did not know this but I learned a valuable lesson this week. I am acquiring my first vehicle in 12 years, so I started the process of acquiring insurance quotes. Well the first thing it wanted was how much liability coverage was needed. I put in standard which is 100k/300k. To make sure I was comparing apples to apples, I dusted off my policy of 12 years and was kind of shocked to see it was only 50k/100k. Hmmm, with that kind of coverage I better hope to crash into a very close relative. So anyways, my rate was $63 for collision/comp $500 deductible with $100/$300. I then checked $300k/$500k coverage and discovered it was only $2.50 more. I am not much on insurance but with a vehicle it is not financially prudent to go cheap.
My point being is (though most do here, I am sure) make sure you have adequate auto liability coverage, and check to see if additional coverage is available in a cheap manner if needed. Needless to say I am going from underinsured to a more responsible coverage level. I imagine 12 years ago, I just said give me the basic coverage and didn't even put a thought into it. I am fortunate I didn't have to find out if it was enough....


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Old 07-12-2014, 11:51 AM   #2
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You may want to consider adding an umbrella policy, as 300K/500K may not really be enough. My umbrella policy requires me to carry a minimum of 300K/500K (plus 100K property damage) on my auto policy.
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Old 07-12-2014, 12:09 PM   #3
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Last year I raised my auto liability limits to 1m/1m (from 250k/500k) as the cost difference was only $9. I don't currently have an umbrella policy.
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Old 07-12-2014, 12:41 PM   #4
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I return to agent to wrap up process Monday. I will ask about additional coverage. When I asked for more, this was the only amount above 100k he gave me. I must assume that most people around here do not go above the standard amount. He did mention he did not personally carry umbrella insurance, just the amount above standard for vehicle. I was surprised that credit rating mattered so much. They rate on scale of 1-21 with 21 the worst. He said mine was 5 and he rarely had anyone under 10. What is so hard with paying your bills on time and not maxing out your credit cards? It is not like I do anything special to have a good score for best rate.


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Old 07-12-2014, 01:45 PM   #5
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Originally Posted by FIRE'd@51 View Post
You may want to consider adding an umbrella policy, as 300K/500K may not really be enough. My umbrella policy requires me to carry a minimum of 300K/500K (plus 100K property damage) on my auto policy.
My new insurance requires a 300/500k to get an umbrella policy too. I haven't signed yet, plan to get the final numbers Monday. Our old policly went up 50% on renewal. The reason was both DW and I have a moving violation(both almost 3 years old), they finally tagged us for them. Even with the violations our new policy has more liability and 1MM umbrella for 10% more than we were paying. The old company lost our business.

Any future speeding tickets will be given to an attorney!
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Old 07-12-2014, 04:28 PM   #6
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Originally Posted by FIRE'd@51 View Post
You may want to consider adding an umbrella policy, as 300K/500K may not really be enough. My umbrella policy requires me to carry a minimum of 300K/500K (plus 100K property damage) on my auto policy.
Same here and we got the umbrella for good reason. A medical helicopter ride can be $40k easy. Intensive care can be $100k or more. Per day. Per person. Not hard at all to smoke through that basic coverage.

And we haven't even started on the lawsuit yet....
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Old 07-12-2014, 04:52 PM   #7
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We just got our August renewal email from USAA. I noticed the cost of liability coverage for DH's vehicle (2006, 6-cyl, 4 door sedan, nothing special) was 32% more expensive than for my vehicle (2002, 4-cyl, 4 door sedan, nothing special).

Called USAA to ask why. Agent said, "Dunno." He switched the primary drivers and the cost was virtually the same.

My vehicle is considered a safer vehicle than DH's but liability insurance shouldn't care about the safety of the driver, just the people you are going to run into, right?

The only significant difference between the two vehicles (since the driver has been taken out of the calculation) is that my car is 4-cyl and his is 6-cyl. Is a more powerful vehicle such a greater liability risk? Not talking any hot rod here. Just a 4-door sedan.
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Old 07-12-2014, 05:02 PM   #8
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Is a more powerful vehicle such a greater liability risk? Not talking any hot rod here. Just a 4-door sedan.
If that is the reason I'd hate to see the premiums on the 707 hp Dodge Challenger!
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Old 07-12-2014, 10:00 PM   #9
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When I bought my umbrella we tested some and found that it was cheaper to increase the underlying liability coverage (auto, home, etc.) and buy a smaller umbrella than leave the underlying coverages where they were and add a bigger umbrella. Total coverage was the same.
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Old 07-12-2014, 10:37 PM   #10
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The only significant difference between the two vehicles (since the driver has been taken out of the calculation) is that my car is 4-cyl and his is 6-cyl. Is a more powerful vehicle such a greater liability risk? Not talking any hot rod here. Just a 4-door sedan.
It all comes to statistics, for clues have a look here for both cars: Insurance loss information

This is also a great source of information about relative safety of the vehicles, before buying a new car.
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Old 07-12-2014, 11:09 PM   #11
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Back in 2010 I considered umbrella but soon realized that because I live in a large co-op complex, the co-op's large liability policy acts like umbrella to some degree. I did, however, increase my auto policy's BI liability limits from 100/200 to 250/500.
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Old 07-13-2014, 08:52 AM   #12
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Back in 2010 I considered umbrella but soon realized that because I live in a large co-op complex, the co-op's large liability policy acts like umbrella to some degree. I did, however, increase my auto policy's BI liability limits from 100/200 to 250/500.
I live in a condo complex and not long ago a unit did have a fire. The fire was caused buy the dishwasher. Luckily it didn't spread to the outer units but that person had to move to temporary housing as the unit got restored. The owners did have their own insurance (required by every owner). I think had the fire spread to other units, if the owner had umbrella, that may have kicked in.

My policies (both car and condo) have 500K liability limits and then I have an umbrella policy around them. IMO, the price is cheap for the peace of mind, like if your best friend slips on your floor and then decides to sue you for your life savings
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Old 07-13-2014, 10:25 AM   #13
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It all comes to statistics, for clues have a look here for both cars: Insurance loss information

This is also a great source of information about relative safety of the vehicles, before buying a new car.
DH's vehicle shows up a couple of times (overlapping windows of data) and all categories are yellow (average). My car is too old to have the property damage and BI data but I looked at a later model close to my model and property damage and BI are yellow. The data appears to be an average for the model and is not broken down by engine size, etc.

Nothing jumps out in the data to explain the 32% difference in BI and the 37% difference in property damage.

I thought maybe a heavier car causes more damage so I checked the curb weight of each vehicle. My car weighs 3,150 lbs and DH's car weighs 3,450. Maybe the extra weight plus the extra horsepower accounts for the difference in risk.
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Old 07-14-2014, 11:41 AM   #14
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Last year I raised my auto liability limits to 1m/1m (from 250k/500k) as the cost difference was only $9. I don't currently have an umbrella policy.
I don't think a lot of companies go that high without and umbrella policy. I think 500/500 is the highest I have heard of.
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Old 07-14-2014, 12:01 PM   #15
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..I then checked $300k/$500k coverage ..


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that is what was required for our umbrella policy.
after the 300k/500k runs out (hopefully we never need it) the umbrella
policy kicks in..
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Old 07-14-2014, 02:16 PM   #16
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I don't think a lot of companies go that high without and umbrella policy. I think 500/500 is the highest I have heard of.
I'm with GEICO.
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Old 07-14-2014, 03:45 PM   #17
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I'm with GEICO.
Good to know.
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Old 07-14-2014, 08:47 PM   #18
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I first bought umbrella coverage when I bought a house with a pool in 1997. We have $2 million coverage now.


State minimum liability requirements for auto are a joke in most states. There's tremendous political pressure to keep the limits low so more people will buy coverage, although judging from the cost of Underinsured/Uninsured Motorists coverage, it's not working.

If you buy higher limits, be sure you get Uninsured/Underinsured at the same level. Pitiful that you have to buy coverage for others, but that's pretty much what you're doing.
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Old 07-14-2014, 09:26 PM   #19
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Originally Posted by Buckeye View Post
We just got our August renewal email from USAA. I noticed the cost of liability coverage for DH's vehicle (2006, 6-cyl, 4 door sedan, nothing special) was 32% more expensive than for my vehicle (2002, 4-cyl, 4 door sedan, nothing special).

Called USAA to ask why. Agent said, "Dunno." He switched the primary drivers and the cost was virtually the same.

My vehicle is considered a safer vehicle than DH's but liability insurance shouldn't care about the safety of the driver, just the people you are going to run into, right?

The only significant difference between the two vehicles (since the driver has been taken out of the calculation) is that my car is 4-cyl and his is 6-cyl. Is a more powerful vehicle such a greater liability risk? Not talking any hot rod here. Just a 4-door sedan.
Sounds like the USAA I have grown to hate. Give Amica a call...you may be surprised. They are rated as well as USAA and as recently reported by Clark Howard last week rated BETTER than USAA.

Sent From My Motorola Startac. Please excuse grammatical errors.
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Old 07-14-2014, 09:27 PM   #20
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There's tremendous political pressure to keep the limits low so more people will buy coverage, although judging from the cost of Underinsured/Uninsured Motorists coverage, it's not working.
I honestly don't know that it's the only reason they drop it. I have a feeling that no matter what the "state minimum" coverage level, many people will still pull the practice of obtaining insurance coverage, then immediately cancelling it as soon as they get their license plate renewed. For some, it might be a matter of not being able afford that extra $50/mo...but something tells me they would continue the practice of 'short-term auto coverage' regardless of what the monthly premium is.

And the gov't thinks these likely same people will pay 2-4 times - or more - as much as their auto policies for health insurance coverage (with much higher deductibles), when they'll still get service at an OR if they truly need emergency healthcare.
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