Car Insurance Liability

[Telly]

We've had an umbrella for over 15 years. Figured the biggest risk to our growing nest egg was an auto accident. And we had kids driving...
A guy in the ins. agency that was very helpful ran the numbers to show us then that hiking up the liability coverage to a certain limit for each of the cars would lower the umbrella premium, so much so that the total of auto ins. + umbrella was less than if we left the cars alone and handled it all via umbrella.

The umbrella premium dropped each time a kid dropped off of our insurance! After the last one, it was way down. Along the way we doubled the umbrella size too.

Still think that an auto accident is our biggest risk factor for our assets. Will probably always have an umbrella.

Walk softly and carry a large umbrella

[scrabbler1]

Quote:

Originally Posted by MooreBonds 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.

Back in my working years, I worked in the actuarial field, specializing in personal auto insurance. One thing I worked on a lot was pricing changes to state laws relating to minimum (Financial Responsibility, or FR) limits and changes to the strength of a state's mandatory insurance laws. Back in the 1980s and 1990s, when technology changes were on the rise, it was pretty common to see the latter.

If a state strengthened its mandatory insurance law in a manner we felt would actually reduce the uninsured population. we would recommend a reduction in the UM rates. From some outside analysis we had purchased, some measures were more effective at reducing this population than others. The big one we saw back then was a state linking its DMV to insurance cancellation reports so the DMV would know is someone paid the first month's premium to get license plates then stopped paying premiums (and do something about it). Other measures we felt were less effective or not effective at all at reducing the uninsured population.

Because we assumed that any additional insurance purchasers would be buying liability at the FR, we also priced a small increase in the Underinsured Motorists premiums. Therefore, if you bought UM and UIM together, the decrease in UM would be partly offset by a small increase in UIM.

[athena53]

Quote:

Originally Posted by MooreBonds 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.

You're probably right. When I worked for a consulting firm we had a client who wanted to provide a product for that market- the customer would pay a little up front, get their insurance card, and pay the rest in installments. I believe it was a very short-term policy (3 months), to keep the installment low. They knew most policies would lapse when the second payment wasn't made. This was not a major carrier; I wish I could remember the name of the client now. We wanted nothing to do with that product.

I just checked state minimum liability requirements. I started my first insurance job in 1975 and in Ohio you had to buy limits of $12,500 per person, $25,000 per accident bodily injury and $7,500 property damage. That's still the minimum.

[38Chevy454]

Quote:

Originally Posted by MooreBonds 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.

You are being much too logical

[Buckeye]

I have been carrying Med Pay instead of UMBI because the Med Pay did not require determination of fault. Is that a crazy choice?

[scrabbler1]

Quote:

Originally Posted by Buckeye I have been carrying Med Pay instead of UMBI because the Med Pay did not require determination of fault. Is that a crazy choice?

Med Pay and UMBI are 2 different coverages. While there is some overlap in what they cover, there are many differences, too. Med Pay covers you and your car's occupants for medical bills if you are in an accident, regardless of fault. It would also cover you in single-car accidents. UMBI, or Uninsured Motorists Bodily Injury, covers you and your car's occupants in case you are in a multi-car accident and the other driver is at fault and lacks any insurance. UMBI will also pay for non-medical damages including non-economic damages (i.e. pain and suffering). In my years of working in the personal auto insurance industry, most policies had both coverages (or, if the state allowed No-Fault, that coverage instead of Med Pay).

[Buckeye]

Quote:

Originally Posted by scrabbler1 Med Pay and UMBI are 2 different coverages. While there is some overlap in what they cover, there are many differences, too. Med Pay covers you and your car's occupants for medical bills if you are in an accident, regardless of fault. It would also cover you in single-car accidents. UMBI, or Uninsured Motorists Bodily Injury, covers you and your car's occupants in case you are in a multi-car accident and the other driver is at fault and lacks any insurance. UMBI will also pay for non-medical damages including non-economic damages (i.e. pain and suffering). In my years of working in the personal auto insurance industry, most policies had both coverages (or, if the state allowed No-Fault, that coverage instead of Med Pay).

Pain and suffering is paying Florida auto insurance rates! Yes, I realized it was only for direct medical costs but it seemed like it might be more flexible where the other party is at fault but their insurance company is taking their sweet time sending money for medical costs. AND it covers UM situations.

[explanade]

When you're referring to $100/300, you're talking about Bodily Injury liability coverage limits per person/per occurrence?

This thread has made me check up on what I have.

[Mulligan]

Quote:

Originally Posted by explanade When you're referring to $100/300, you're talking about Bodily Injury liability coverage limits per person/per occurrence? This thread has made me check up on what I have.

That is what I consider it to be.


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[Amethyst]

For questions like this one, it's well to remember that 50% of the population is below average for any given trait. Yet, they still buy stuff. And vote.

Amethyst

Quote:

Originally Posted by Mulligan What is so hard with paying your bills on time and not maxing out your credit cards?

[athena53]

Quote:

Originally Posted by scrabbler1 Med Pay and UMBI are 2 different coverages. While there is some overlap in what they cover, there are many differences, too. Med Pay covers you and your car's occupants for medical bills if you are in an accident, regardless of fault.

Med Pay limits are also pretty low. The idea is that for minor injuries, you can offer something to the injured party without involving lawyers or courts and figuring out who was at fault.

There's a similar coverage in Homeowners. A couple of summers ago, we had a pool party for the church youth group and after being told for the 5th time not to jump off the side of the diving board, our priest's stubborn 5-year old son did it when no one was looking, grazed the back of his head against the board, and was driven screaming and bleeding off to the ER. (I should add that we're Episcopalian and our priests frequently have kids!) He was fixed with a few staples and I offered later to cover any deductible or other out-of-pocket expenses they had. They thanked me and said it wasn't necessary, but that's the kind of thing Med Pay would cover.