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Auto insurance Coverage ?

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Trying to figure out auto insurance coverages. If I have $10k in cash, no other assets, $50k in student debt and $20k car loan..... what liability limits do I need?
For example, if I have $100k/$300k and am involved in serious accident that has costs over $100k, can the other insurance company come after my $10k? 
I thought since the $100k coverage is more than my assets of $10K, that the $10k is safe. Is this correct?
I was always told to have as much liability coverage as my assets.
Thanks.
 

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rated:
does your state require insurance?

rated:
In PA, yes.

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rbuck1pirate said:    I was always told to have as much liability coverage as my assets. 
I never understood the logic behind this. Your liability can realistically be substantially more (or less) than your assets. You can be sued for any liability more than your coverage limits. 
ETA: The incremental premium for increasing coverage beyond state minimums are relatively small.

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fwuser12 said:   
rbuck1pirate said:    I was always told to have as much liability coverage as my assets. 
I never understood the logic behind this. Your liability can realistically be substantially more (or less) than your assets. You can be sued for any liability more than your coverage limits. 
ETA: The incremental premium for increasing coverage beyond state minimums are relatively small.

  Yup, they can get a judgment that covers all your assets and your entire liability coverage. Then they can garnish your wages for 10 years or more.

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Yet people drive around with the state minimum coverage. 

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Federal law places limits on wage garnishment amounts. However, Pennsylvania imposes even stricter limits. In Pennsylvania, garnishments are only permitted for:

  • child or spousal support,
  • obligations relating to a final divorce distribution
  • back rent on a residential lease
  • certain types of taxes
  • student loans, and
  • court ordered restitution in criminal matters.

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qcumber98 said:   Yet people drive around with the state minimum coverage. 
  And in Pennsylvania the minimum required liability coverage is 15k/30k. To me that is ridiculously low. This is where uninsured/underinsured coverage comes in. But why should I have to pay extra for my own insurance because other people are driving around with such low coverage?

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prosperity said:   
qcumber98 said:   Yet people drive around with the state minimum coverage. 
  And in Pennsylvania the minimum required liability coverage is 15k/30k. To me that is ridiculously low. This is where uninsured/underinsured coverage comes in. But why should I have to pay extra for my own insurance because other people are driving around with such low coverage?

  Because you can spend time suing them and getting their 'low assets' or you pay an additional $XX and always make sure your nice car is repaired and your medical needs are met.

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prosperity said:   
qcumber98 said:   Yet people drive around with the state minimum coverage. 
  And in Pennsylvania the minimum required liability coverage is 15k/30k. To me that is ridiculously low. This is where uninsured/underinsured coverage comes in. But why should I have to pay extra for my own insurance because other people are driving around with such low coverage?
 

  You answered your own question Don't forget there are people driving around with NO coverage even if the state mandates coverage.

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The quick answer is buy as much as you can afford. Going from 100/300 to 250/500 is usually only a few dollars. I work in claims and have 250/500/100.

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stanolshefski said:   
fwuser12 said:   
rbuck1pirate said:    I was always told to have as much liability coverage as my assets. 
I never understood the logic behind this. Your liability can realistically be substantially more (or less) than your assets. You can be sued for any liability more than your coverage limits. 
ETA: The incremental premium for increasing coverage beyond state minimums are relatively small.

  Yup, they can get a judgment that covers all your assets and your entire liability coverage. Then they can garnish your wages for 10 years or more.

Sounds like an ideal candidate for a bankruptcy.

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stanolshefski said: Yup, they can get a judgment that covers all your assets and your entire liability coverage. Then they can garnish your wages for 10 years or more.

Not quite all assets are covered by a judgement.  If you have an ERISA-qualified 401(k) or pension plan, your savings are probably safe from creditors. In such plans, your money generally has complete protection under federal law from garnishment, attachment, and other creditor remedies, so long as your debt isn’t for failure to pay taxes or for defrauding the plan itself. 

The Supreme Court ruled unanimously that IRAs should join pensions, 401(k)s, Social Security and other benefits tied to age, illness or disability, that are afforded protection under federal bankruptcy law and thus shielded from creditors in bankruptcy proceedings.

Finally, most states protect your primary residence from creditors.

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I'd also consider your income (high or low), and your state's rules for garnishing wages to satisfy a personal injury judgment Maybe a bad accident could wipeout your lifetime earnings, or maybe not. Let us know what you find out. Perhaps if you name the state, a personal injury lawyer here could comment.

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I do 100/300/100 to match my uninsured motorist coverage but never saw the need to jump up to 250/500. 100/300 covers most incidences and if something goes up to needing the half million, it might be a million (i.e.if a crash paralyzed someone young, thus requiring lifetime care).

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calwatch said:   I do 100/300/100 to match my uninsured motorist coverage but never saw the need to jump up to 250/500. 100/300 covers most incidences and if something goes up to needing the half million, it might be a million (i.e.if a crash paralyzed someone young, thus requiring lifetime care).
  If you get umbrella coverage, then liability automatically goes up to 250/500 (at least for State Farm).  The difference in price isn't that much either.

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calwatch said:   I do 100/300/100 to match my uninsured motorist coverage but never saw the need to jump up to 250/500. 100/300 covers most incidences and if something goes up to needing the half million, it might be a million (i.e.if a crash paralyzed someone young, thus requiring lifetime care).
  One issue is that generally uninsured and underinsured coverage cannot exceed your liability coverage. So, lower bodily injury coverage means that you are limited to those levels for your own protection (though some insurers/states allow you to "stack" the UI/UM coverage if you have multiple cars).

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calwatch said:   I do 100/300/100 to match my uninsured motorist coverage but never saw the need to jump up to 250/500. 100/300 covers most incidences and if something goes up to needing the half million, it might be a million (i.e.if a crash paralyzed someone young, thus requiring lifetime care).
  
My thought has always been to be between where the insurance company has enough on the line to CARE, and not so much that I am paying significantly more.  100/300 is where I have been for quite some time.   If I changed anything it would likely be to a CSL policy.

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What do you guys think about the NJ 'restriction to sue'? I think I need that for the first year of my business to save cash?

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RedWolfe01 said:   
calwatch said:   I do 100/300/100 to match my uninsured motorist coverage but never saw the need to jump up to 250/500. 100/300 covers most incidences and if something goes up to needing the half million, it might be a million (i.e.if a crash paralyzed someone young, thus requiring lifetime care).
  
My thought has always been to be between where the insurance company has enough on the line to CARE, and not so much that I am paying significantly more.  100/300 is where I have been for quite some time.   If I changed anything it would likely be to a CSL policy.

  CSL seems to cost more than separate bodily injury and property damage liability coverage. The only thing it adds for me is higher property damage liability. 

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Kingofthenet said:   What do you guys think about the NJ 'restriction to sue'? I think I need that for the first year of my business to save cash?
  This is only specific to suing for Pain & Suffering for non-permanent injuries.  Plenty of mixed opinions on this.  The majority of people go with limited tort, it saves a decent chunk of money.

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