A few months ago, one of my friends got into a 5 car pile-up. His was the last car and he was deemed "at fault". The details are a little sketchy, but the net result is that he was deemed responsible for all of the property damage of all the cards in front of him. The total damage claim was about 120k. He carried the state minimum "property damage liability" coverage of 25k and is on the hook for the rest of it.
Looking at that example, I quickly maxed my auto-insurance liability coverages to the max available limits. In fact, I increased my "property damage liability" coverage to 500k - thinking "what if I hit a bugatti"?
Now that I am thinking again about it, I can clearly see the irrationality of maxing out the liability coverages and paying ~$200 per month in auto-insurance while driving < 5000 miles per year in both of our cars combined.
We obviously need coverage against the scenarios like my friend faced. And at the same time - buying insurance for extremely rare scenarios is bad risk management.
So what is your auto insurance limit? liability? property damage? medical? etc. Any rationale behind these limits?
Message edited by: puddonhead on 2009-10-09 19:34:26 CDT
To enter a coupon code in your post please enter the following info:
Coupon Code:
Coupon Offer:
Merchant:
Expires (optional):
Restrictions (optional):
saving...
Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
puddonhead said:He carried the state minimum "property damage liability" coverage of 25k and is on the hook for the rest of itDoes each other individual plan on suing him in small claims or what ?
thinking "what if I hit a bugatti I change lanes if I find myself behind an Aston Martin, Ferrari, Maybach, or such
Message edited by: xoneinax on 2009-10-09 12:18:22 CDT
better to check out what $1M umbrella policy costs. it will require a certain amount of auto insurance, could be less than what op just maxed to. but it will cover more situations.
>> Does each other individual plan on suing him in small claims or what ?
Apparently the police report stated something to the effect that my freind hit car A after it stopped, which caused Car A to hit Car B, which in turn hit Car C etc. etc. There was a lawsuit which, apparently, his insurance company settled agreeing to pay up to his coverage limit. Somehow he is now on the hook for the rest of the money.
I don't have any more details on this. It is obvously not a pleasant topic to discuss and it is pretty awkward to dig into the details other than the information that he volunteered.
puddonhead said:...His was the last car and he was deemed "at fault". The details are a little sketchy, but the net result is that he was deemed responsible for all of the property damage of all the cards in front of him...
Wow, what state are you in? As I understand it, here in California, when there's a multi car pile up, each driver is responsible for the car that his/her car hit.
To answer your question, I carry 100K for property damage (lots of expensive cars here in Ca.) The state minumum is unbelievably only $5K. I was hit by someone with the minimum and sustained only moderate damage, and the repairs and car rental costs were over $4K (of course I also carry uninsured/underinsured motorist coverage).
>> Wow, what state are you in? As I understand it, here in California, when there's a multi car pile up, each driver is responsible for the car that his/her car hit.
The accident happened somewhere in upstate New York. I am in CT.
Message edited by: puddonhead on 2009-10-09 12:52:18 CDT
puddonhead said:>> Does each other individual plan on suing him in small claims or what ?
Apparently the police report stated something to the effect that my freind hit car A after it stopped, which caused Car A to hit Car B, which in turn hit Car C etc. etc. There was a lawsuit which, apparently, his insurance company settled agreeing to pay up to his coverage limit. Somehow he is now on the hook for the rest of the money.
I don't have any more details on this. It is obvously not a pleasant topic to discuss and it is pretty awkward to dig into the details other than the information that he volunteered.
This doesn't sound right...check with an attorney or research the laws, but I believe a driver is required to leave sufficient room between their car and the car in front of them so if they get hit from behind, they won't hit the car in front of them. It sounds to me like the insurance company knew they'd be paying out 25K regardless so they paid, washed their hands of additional liability, and left your friend to fend for himself.
Interesting scenario. As poster above, I thought OP would be liable to Car A only. Is it OP's fault that Car A was very close to Car B? Is OP's insurance company paying 25k to remove itself from the lawsuit and have OP fight for the remaining balance?
Were all the 5 cars totaled (for $120K)? I understand Car A being totaled, but even Car B, C and D??? Seems odd...
>> Were all the 5 cars totaled (for $120K)? I understand Car A being totaled, but even Car B, C and D??? Seems odd. Not sure of the details. Just speculating - may be there were medical expenses involved too. I was not in the accident site and was not involved in the whole process anywhere - so not sure of the details.
Snyder81 said:puddonhead said:>> Does each other individual plan on suing him in small claims or what ?
Apparently the police report stated something to the effect that my freind hit car A after it stopped, which caused Car A to hit Car B, which in turn hit Car C etc. etc. There was a lawsuit which, apparently, his insurance company settled agreeing to pay up to his coverage limit. Somehow he is now on the hook for the rest of the money.
I don't have any more details on this. It is obvously not a pleasant topic to discuss and it is pretty awkward to dig into the details other than the information that he volunteered.
This doesn't sound right...check with an attorney or research the laws, but I believe a driver is required to leave sufficient room between their car and the car in front of them so if they get hit from behind, they won't hit the car in front of them. It sounds to me like the insurance company knew they'd be paying out 25K regardless so they paid, washed their hands of additional liability, and left your friend to fend for himself.
I wouldn't take just a couple posts on a forum talking about "I don't think there is such a law" at much word. On the other hand, some guy talking about his following too closely ticket that he got after rear-ending someone is a bit more important, to me. One would think that each driver would get the same ticket for consequently following too close to the person they rear-ended. I do think you are right about the ins. co washing their hands however.
As demonstrated by the OPs story, having higher limits can be beneficial by keeping your insurance company invovled. If you have higher limits, your company (and specifically their lawyers) have more incentive to fight on your behalf. In the OPs story, the insurance company paid and ran quickly because the limit was so low.
Obvisously though, you need to find a balance so that you're not overpaying for coverage you don't need. For me, I carry 300,000 coverage because that's about what all my assets are worth (house, cars, personal property, cash investments). As suggested earlier, if you need higher coverage, look into an umbrella policy. They are cheap for the coverage that you get, but insurance companies require that you already maintain certain limits on your homeowners and auto policies.
>> I carry 300,000 coverage because that's about what all my assets are worth (house, cars, personal property, cash investments)
Apologies for being thick here - but I dont understand the logic behind carrying coverage equal to your assets. If you have a liability for X - and your coverage is Y - then you are on the hook for (X-Y) if X > Y. If you have some assets (lets say Z) then X-Y may be taken from there.
The only reason why I see assets being a factor is if you dont have any assets - then you have nothing to protect and you have nothing to fear from a lawsuit. If you have "some" assets that you want to protect - then you need to carry liability limits which will be sufficient to cover your likely liability. i.e. presence of assets should be a binary indicator to determine if you need "state minimum" or "good coverage".
i.e. irrespective of whether you have $300k or $500k (both are significant figures that you would probably want to protect) - I believe that should not be a factor to determine whether you carry $300k or $500k liability coverage.
What am I missing here?
Message edited by: puddonhead on 2009-10-09 14:50:25 CDT
We've always carried a $1 million dollar umbrella policy, when rolled in with the same company covering your home (and auto if possible), they're dirt cheap. You're covered if you cause a semi with a load of Mercedes to overturn and as mentioned, there is the belief that the more the insurance company stands to lose, the more they will fight for you.
I keep mine low because I dont have many assest at this time and in the unlikely event I am hit with a huge judgement good luck trying to cash that one in.
OFFascist said:I keep mine low because I dont have many assest at this time and in the unlikely event I am hit with a huge judgement good luck trying to cash that one in.
If you happen to be in a state that allows this - then wont your salary be garnished for the rest of your life?
Just to be clear - I have no idea about your specific scenario - but isn't that something we, monthly-paycheck guys, need to consider?
Message edited by: puddonhead on 2009-10-09 15:17:06 CDT
From an INSURANCE standpoint, the person that caused the entire accident is at fault for everyone. However, as far as the driving laws go, each person that hit the other would be at fault for ACDA (Assured Clear Distance Ahead). YMMV on state laws, but that's Ohio.
99% of the time, the MINIMUM liability coverage limits to have an umbrella policy is $250,000/$500,000 ($250K per person up to a total claim of $500K) on autos and $300,000 for home/renters. This coverage does NOT cover PROPERTY damage; just medical claims to others and if you're sued.
State minimum coverage varies from state to state, but in Ohio, the minimum is $12.5K/$25K/$7.5K. For those who don't know how that works, that means if you're at fault for an accident/claim, your insurance company will pay out a maximum of $12,500 per person for liability/medical to each person involved (NOT YOU) up to a total claim of $25,000; they will pay out up to $7500 for property damages to those involved (again, NOT YOU/YOUR CAR).
I had an accident 2 years back (drove off the road into a ditch) and was taken via ambulance to a local hospital. My bills were $20,000+ for just the ride there and a few X-Rays (and 2 stitches from broken glass). My auto insurance picked up $2000 of that because that was my medical limits. Luckally, my health insurance covered the rest.
So all that said above, my coverage is $250K/$500K/$100K. I have Uninsured/under insured coverage of the same limits as well just in case I get hit by someone with state minimum coverage- my car is worth more than $7500 and I know if I have to go to the hospital for ANYTHING my bills more more than likely be more than $12,500.
I'm at 25/50k personal, 25k property and 10/20 stacked UIM. I don't really have any assets to speak of, so anything much higher then that, I'm just going nuclear.
Geico won't let me get a quote for less then 10k/20k/10k so I'm assuming those are florida state mins. UIM not required, although I remember it being required in NYS
Message edited by: scrouds on 2009-10-09 15:37:12 CDT
250/500k etc... You also have to be aware, that if you have passengers in your vehicle and you get into an accident, it doesn't matter who caused it. You are on the hook for your passengers. A friend of mine got into an accident with 2 passengers and he had the minimum insurance because he is a cheapskate with only 5k medical for each person. A trip to the ER for the passengers used that up pretty quickly as you can imagine with one CT scan to check for back/neck injuries. It was very painful and time consuming for my friend to sue this person to get the rest of the medical expenses covered after the fact. If he had higher coverage limits, it would have been easier to get all the expenses covered and less straining on their relationship.
It is also not that much more to jump from 25/50k to 250/500k of insurance. I think when I changed mine after seeing what my friend was going through it was only something like $40/50 more a YEAR for 10 times the coverage.
Message edited by: leprechaun92 on 2009-10-09 15:42:14 CDT
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
