Why Carry More Auto Insurance Than the Limits?

In North Dakota, drivers are required to carry a minimum amount of bodily injury liability coverage equal to $25,000 per person/$50,000 per accident, and $25,000 per accident for property damage.

Why should you consider carrying more?

When a crash is your fault and you only carry the minimum limits.

It is always a good idea to buy more than the minimum auto insurance coverage in order to protect your assets. The damages caused by an automobile accident can be substantial, and they can quickly wipe out your savings as well as your assets when the accident is your fault but you don’t have enough coverage to pay for the harm. Property damage, medical bills and pain and suffering for the other party would be your responsibility, and once your insurance limits are exhausted, you can be held personally responsible for the remaining damages out of your own pocket.

When a crash is NOT your fault but the at-fault driver has no insurance or only the minimum insurance.

If you are struck by another driver, and that driver has the minimum or no insurance, then your best remedy will likely be against your own insurance company. Your Auto Policy will contain a certain limit of Uninsured or Underinsured (UM/UIM) coverage to protect you in these situations. You will not be fully compensated for your property damage, medical bills or pain and suffering that are caused by a driver with no insurance (or minimum insurance) UNLESS you have sufficient UM/UIM coverage to protect you in these situations.

Most people don’t realize how important it is to have not only adequate insurance to protect them for any potential liability they may have in a collision, but also to protect themselves against uninsured or under insured drivers who may injure them or their family.

Recently, I have had several cases in Western North Dakota where inadequate UM/UIM coverage has become an issue, and it is a devastating situation when you have to inform the family there is a very small chance for recovery. Specifically, I had a case where a young man was a passenger in a collision and he was killed in the crash. The at-fault driver was not insured. The young man who was killed also had no insurance. He was a father to a small child. The family contacted me to try to find a way to pay for the funeral and to set up a trust fund for the small child. Unfortunately, the driver who caused the crash left the state and went into hiding, and there is no insurance coverage available to help this family.

If the young man in this example would have had insurance with the minimum uninsured motorist limits of $25,000 per person/$50,000 per accident, his family would have been able to make a claim against this policy up to the max of $25,000.

Better yet, if the young man would have had insurance with higher uninsured motorist limits of $250,000 per person/$500,000 per accident, then his family would have been able to make a claim against this policy for up to $250,000.

A set limit on your insurance policy doesn’t mean that once you are injured, that you are automatically entitled to receive the full benefit available, as you still have to prove your damages. However, in the example above, proving damages in excess of $25,000 and closer to $250,000 would have likely been quite simple given the cost of raising and supporting a child in the United States.

I realize that spending money on insurance isn’t fun, but I would like you to also keep in mind that auto insurance will most likely come to your rescue at some point, so it’s important to purchase sufficient coverage that will adequately protect yourself and your family should disaster strike.