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Don't Drive Without Sufficient Insurance

By Ron Lent

States require motorists to buy automobile liability insurance, but how much coverage is enough for you? It's your decision to make, but it's safe to assume that you'll probably need more than "bare minimum amounts" of auto insurance on each vehicle that you own. Talking about what constitutes sufficient auto insurance are Jerry Davies of the Personal Insurance Federation of California, headquartered in Sacramento, Jeanne Salvatore of the Insurance Information Institute (III) of New York, and longtime motorist Esther Friedman of San Rafael, CA.

"Having bare minimum amounts of bodily injury liability and property damage liability may keep you in compliance with state laws requiring motorists to have basic automobile insurance," said Davies. However, "having basic coverage probably won't be enough to protect your bank accounts and other personal assets if you're found to be at-fault in a vehicular accident that causes serious bodily injury and/or property damage," Davies warned.

Davies suggests that consumers review their auto insurance policies annually with either their insurance company or their representative. "Do that once a year or soon after making a major acquisition such as a vacation home, a diamond ring or a big-ticket car," said Davies. "You want to make sure that you have adequate coverage at all times. You may have coverage for major purchases under your homeowners insurance, but if you're found to be at-fault in a serious auto accident, your automobile liability insurance may not fully pay your debt and you may have to rely on the sale of some of your personal assets to make up the difference."

A consumer affairs officer makes a bottom-line point about auto insurance. "It is illegal to operate a car without having purchased at least the state minimum of automobile liability insurance," says Jeanne Salvatore, Vice President of Consumer Affairs with III. "Every state has a financial responsibility law for drivers, and that usually means you must buy at least the state-required minimums of liability insurance," she says.

(State-by-state minimum requirements for automobile insurance are spelled out in the accompanying article.)

"It's prudent to purchase more liability insurance (than state-mandated minimums) to provide yourself financial protection in the event you're in a serious accident or your car is stolen," says Salvatore. "Insurance experts recommend that you purchase at least $100,000 per individual and $300,000 per accident, but many people should consider buying much more coverage because of skyrocketing medical treatment costs, litigation and repair costs in today's society."

If you have a newer car, Salvatore recommends both comprehensive ("comp") and collision coverage. Comp and collision provides protection if the vehicle is stolen, damaged by a natural disaster such as a tree limb falling on your car in a storm, or your car gets damaged because of a collision with a deer or other animal.

Esther Friedman indicates that she and her husband carry enough automobile insurance to pay for repairs to their Toyota Camry and cover bodily injury and property damage exposures if their car becomes involved in a vehicular accident. Friedman says that she has never been in an accident in her almost 40 years of driving experience, "but I have insurance just in case. I just hope I never have to use it."

Last updated Jan. 2, 2003

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