Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Apr 29, 2019

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Most people don’t exactly enjoy paying premiums to buy insurance policies. Because of this, many drivers desire to pay for the minimum amount of coverage when purchasing auto insurance for their vehicles.

While this strategy can be useful for some people, it’s not necessarily the best approach to take for everyone.

If you’re interested in getting the minimum coverage, check out one of the many auto insurance comparison websites and start getting quotes.

Just enter your ZIP code into the FREE tool!

What is Minimum Coverage?

When a driver says that he wants minimum coverage for his auto, what exactly does this mean? Who sets the minimum coverage for an auto insurance policy? In this case, the driver is most likely interested in getting the minimum liability coverage for his car.

The minimum liability coverage is set forth by state law. All 50 states have their own laws about how much liability coverage drivers must have in order to drive on public roads.

These laws are put in place to protect the other drivers on the road. This way, if you cause a wreck and someone else’s car is damaged, that person will not have to pay for the damage.

Your liability insurance will kick in, and pay for the other driver’s car and medical bills.

This ensures that everyone on the road can drive without worrying about someone else wronging them in some way.

Minimum Coverage Quotes

When it comes to buying an insurance policy with the minimum coverage available, insurance companies quote the coverage in particular way. For example, when you’re shopping for minimum coverage, you might see that the policy offers 25/50/30 coverage.

Each number represents a certain type of liability coverage in thousands. The first number means that the policy offers $25,000 of personal injury coverage per person involved in the wreck.

The 50 means that the policy provides $50,000 of liability coverage per claim, regardless of how many people are hurt. The third number means that the policy gives up to $30,000 of coverage for personal property damage caused in the wreck.

Every state has its own three numbers to indicate what you have to get for the minimum amount of liability coverage.

Should You Get Minimum Coverage?

Although you are entitled to get minimum coverage no matter where you live, it may not always be the best idea. In many cases, having the minimum coverage available for liability insurance just isn’t enough coverage.

Many times, the damage caused in a wreck is much higher than what the minimum coverage level is. That’s why it’s known as the “minimum” coverage and not adequate coverage.

For example, if you live in a state where the minimum coverage for bodily injury is $25,000, you could have coverage that is well below what medical bills would actually cost after a wreck.

Medical costs are increasing almost every day, and its not uncommon for medical bills to be hundreds of thousands of dollars after a bad wreck.

If this happens and you’re responsible for $200,000 in medical bills but your insurance provider will cover $25,000, this leaves you with $175,000 to come up with on your own.

Most people don’t have $175,000 sitting in a bank account just waiting to be spent. This means that you’d have to file for bankruptcy or make payments to the other driver for the rest of your life.

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A Better Approach

Instead of just getting the minimum amount of coverage that’s available, you should instead look at your auto insurance needs from another perspective. Think about how much liability coverage you should get in terms of limiting out of pocket cash that you’d have to come up with.

Talk to an insurance agent about how much coverage is recommended in a particular area of liability insurance before making a purchase.

In most cases, the difference in premiums between the minimum amount of coverage and an adequate amount of coverage is very small.

You might only hvae to pay a few more dollars per month in premiums, and you can get quite a bit more in coverage. Because of this, it often makes sense to avoid the minimum liability coverage and get a higher amount of coverage to protect you adequately.

Other Coverage Options

In addition to the minimum liability coverage, it may also make sense to buy some other coverage options. For example, buying collision and comprehensive could also be wise. With collision insurance, you protect your own vehicle from damage.

If you’re at fault in a wreck, this part of your policy will pay to fix your car or pay for a new one, depending on the market value.

With comprehensive insurance, you get coverage against all kinds of damage. If your vehicle is sitting next to a building and catches on fire, your comprehensive coverage may provide benefits.

If your car is stolen, comprehensive insurance can provide benefits as well. Having both of these options in addition to liability coverage makes sense, as it can protect you from most perils and protect your financial position at the same time.

Considerations

If you are in the market for car insurance, it’s usually in your best interest to shop around and see what people have to offer. Unless you’re comfortable with the risk that comes with minimum coverage, consider looking at some of the other policies out there first.

Get on an insurance policy comparison site and start shopping for coverage today. Enter your ZIP code into the FREE comparison tool now!

Related posts:

  1. What is the minimum auto insurance needed?
  2. What is Collision Coverage?
  3. What is full coverage car insurance?