To understand how much insurance you should have, it is important to know the types of coverage available in a typical Ohio automobile insurance policy. Here is a quick summary:
- Liability Bodily Injury (covers you for an accident where you are at fault and someone else is hurt)
- Liability Property Damage (covers you for an accident where you are at fault and there is damage to someone else’s car or property)
- Medical Payments (covers medical bills incurred by you or a passenger in your car. Medical payments coverage will pay regardless of who is at fault)
- Uninsured/Underinsured Motorists (often called UIM-this covers you and passengers in your car in cases where the at-fault driver has no insurance or the at-fault driver has a policy that is too small to make up for all the harms and losses caused)
In Ohio, the state minimum insurance limit for liability coverage that an insurance company can sell on a policy is $25,000.00 per person, $50,000.00 per accident. This means that the minimum amount of coverage that you are required by law to have is $25,000.00 to cover damages in an accident that is your fault. If you cause an accident, the liability coverage of $25,000.00 will pay any damages that are suffered by the other drivers or passengers involved. With the high cost of medical treatment and the potential of other significant harms and losses, like time off work, $25,000.00 in coverage provides very little protection to you.
The insurance company will never pay more than the limits of liability coverage that you purchase. If you cause an accident, and your insurance is not enough to cover the other party’s damages, the other party has the right to sue you to collect from your personal assets. This means that the person damaged may sue you and obtain a judgment and then seek to garnish your wages or place liens against your real estate and other personal property Because of this, it is important that you have enough insurance coverage to protect yourself in case you cause an accident.
How much you pay for a liability policy obviously increases as the limits of liability increase. However, it may not cost as much as you think. You may be able to increase liability coverage from $25,000.00 to $100,000.00 for as little as a 5% increase because the additional coverage is not nearly as expensive as getting the policy in the first place. Shop around to get the best price. Having the right insurance and the right insurance coverage is often compared to having an umbrella. It is like Murphys’ law. When you have an umbrella it never rains. The minute you leave your umbrella back at home, you find yourself in the middle of a rainstorm. Having enough liability insurance coverage means protecting all the things that you’ve worked so hard to acquire.
But what happens when an accident is not your fault, and you are the victim? Read our next blog about how to protect yourself from the uninsured and underinsured drivers on our roadways.