5 dangers of driving with the minimum limits of Utah state policy
# 1 The 25/65 Hazard in Bodily Injury Liability Coverage
This is the coverage that protects you from being sued if you are the at-fault driver in an accident and injure someone. The 25 refers to a limit of $ 25,000 per person who injures. Your insurance will pay up to $ 25,000 for one person’s injuries. Any amount above that, you are responsible. What if someone loses a limb or the ability to earn a living due to an accident that you caused? Certainly $ 25,000 would not be enough. The 65 refers to $ 65,000 which would be the total amount that our insurance would pay for an incident. If three people were in the other car and each had medical bills of $ 30,000, you would be responsible for any amount over $ 65,000, which would be $ 25,000.
# 2 The Danger of Having Only $ 15,000 in Liability Coverage
Property liability coverage refers to damage that you cause to someone else’s property. What are your car brakes and your car knocked down the wall of a house? What happens if you crash into a $ 60,000 Mercedes? In both cases, you would be financially responsible in the amount of more than $ 15,000. With so many expensive vehicles on the road, it would not be difficult to reach that amount to repair a damaged car.
# 3 The danger of having only the required $ 3,000 in PIP
PIP refers to personal injury protection coverage. This is required coverage in the state of Utah and is important because it allows everyone the benefit of medical coverage, whether they are at fault for the accident or not. Some states do not require this coverage at all. But Utah is a no-fault state, which means no-fault must be proven for health coverage to kick in. The danger with having the lower limit, which is $ 3,000, is that it is not enough coverage in the event of a serious injury. An ambulance trip and an emergency room visit will practically consume that amount immediately.
Your PIP of $ 3,000 would also be the limit on what your insurance would pay if you were driving with passengers in your car when an accident occurred. What if you lose control of your on a patch of black ice and hurtles into a ditch? If you have multiple friends in your car who were seriously injured, the $ 3,000 PIP for each probably wouldn’t be enough for your medical costs. Imagine the devastation you would feel if you were unable to adequately cover your financial burdens due to an accident that occurred in our vehicle.
# 4 The danger of not having comprehensive and collision coverage for your own vehicle
Comprehensive and collision coverage are both optional coverages. These are the ones that cover the actual physical damage to your vehicle. You can choose higher deductibles to help keep your premium low if you want. Any deductible you choose will be deducted from the amount that insurance would pay for damage to your car. For example, if you backed into your garage and damaged your car in the amount of $ 1,800 and your collision coverage had a $ 500 deductible, then $ 500 would be deducted from $ 1,800 and you would receive $ 1,300 for the repairs. You would be responsible for contributing the other $ 500 for the auto body shop. Collision coverage covers only collisions.
Comprehensive coverage covers anything else that could damage your car. Hail, wind, ice, fire, or vandalism. This is also the coverage that is activated when a stone hits your windshield on the highway and cracks it. It usually has a deductible as well. Comprehensive and collision coverage are the most expensive coverages because they are determined by the value of your car. The newer and more expensive your car, the higher the premium for this coverage.
These coverages are optional unless you have a lien on the car. The lender will require that your financial interest in the car be covered in the event that the vehicle suffers damage that diminishes its value. If our insurance coverage ever expires, your insurance company will notify your lender and they can add their own insurance premium to your loan. This is very expensive and carries a high deductible and you don’t want this to happen.
In case you decide that you don’t want to bring an all-risk and collision vehicle in your car, make sure you can afford to replace or repair the damage in the event of an accident. If your car is old and not worth much, skipping coverage may be a good financial idea because of the premium it would save.
# 5 The dangers of not having any UM / UIM coverage
UM refers to uninsured motorists and UIM refers to underinsured motorists. You may wonder why you would need to have insurance if the other does not when required by law. This is a good question and the answer is because some people break the law and drive without insurance and some make poor decisions and choose the minimum amounts of liability required by the state. These same drivers are probably the ones who are careless drivers and are causing accidents. If you are hit, you must protect yourself and your passengers. The premium for this insurance coverage is minimal and worth the extra few dollars in premium.
It is in your best interest to sit down with your insurance agent and review each of your coverages to make sure your limits are sufficient and responsible for your needs now and in the future.