Is it time to review Your Liability Auto Insurance? Most of us buy first automobile insurance when we are “young and poor.” Our interaction with an insurance sales agent goes something like this: “I have no money. Sell me the cheapest coverage you have to let me legally drive in Alaska.” As a result, insurance sales agents normally sell us “statutory minimum” “50/100” liability insurance.
Statutory Minimum Is Not Enough
Problems arise when we get older. We are (hopefully) not so poor. Living the American Dream, many of us have worked hard and saved money. We have a home and are raising families. Through decades of effort, we have a bit of “heel on our shoes.” Yet, we continue to drive with the same terrible automobile insurance that we bought as kids…
If you are over 35 (and certainly if you are over 45) it is time to update your automobile insurance. Here are my nuts-and-bolts suggestions, after 33 years of cutting through automobile insurance like a hot knife through butter. Talk to your insurance sales agent. An insurance sales agent is trained to help you understand how much insurance is appropriate in your circumstances. It is their job to ask you questions, evaluate your situation, and make informed suggestions. Furthermore, this service costs you nothing. Call your insurance sales agent right now and set up an “Insurance Review Meeting.”
Liability Insurance
If you really don’t want to ask your insurance sales agent (or don’t have one), I recommend the following as the absolute minimum automobile insurance you should buy before getting on Alaskan roads. This protects you from claims arising from your driving. If you lose control of your vehicle and hurt somebody, this insurance is what stands between you and bankruptcy. I recommend a minimum of 100/300, that is $100K per person, and $300K per accident. This is OK coverage. It would grade 100/300 as C+ coverage. It is far better than 50/100, but it does not provide much beyond minimal protection.
The next step up is 250/500 or $250K per person, and $500K per accident. 250/500 is B+ coverage. It is reasonable.
When deciding how much liability insurance to buy, the key is realizing that you are driving 4,000 pounds of steel at 55+ MPH on icy Alaskan roads. If you lose control and injure/kill another person be sure you have enough liability insurance to pay the other persons’ medical bills, lost wages, pain, suffering, and disability. If you don’t buy enough liability insurance to cover these claims, the balance of the injured persons’ claims come out of your pocket.
How Much Does It Cost
IMPORTANT: The cost of liability insurance is NOT linear. In other words, 100/300 does NOT cost twice as much as 50/100. Usually, doubling your 50/100 liability insurance should cost you less than $75 every six months. The expensive insurance is the 50/100 coverage that you already have.
This Blog is Part 1 of a 3 Part Series. Check these posts for information about U/UIM and MedPay Insurance.
The Merdes Law Firm has been helping injured Alaskans for more than 30 years. It’s who we are. And while we hope you never need us … We’re here if you do. ~ Ward Merdes
Source: Ward Merdes
Image Source: Adobe Stock
