Q&A: What are the odds that 100/300/100 is not enough ?

Question by : What are the odds that 100/300/100 is not enough ?
First of all, what are the odds that I even cause a wreck, and then if I do that the damages exceed 100/300/100 ?


Seems to me they are minuscule. But even if the damages went over, what are the chances of the insurance company coming after me for the excess ?

I kind of see insurance as a wager against the likely so for years, I didn’t have ANY at all. Then, after they changed the law in my state that made it mandatory, I still somehow made it another 10 years before getting a ticket. At that point, buying insurance made my fine cheaper so I did and Ive kept it ever since. And later went up on the coverage from the minimum because it was cheap.

But, I don’t insure my house, I was going to but they wanted to jack up my rate about 20% because I didn’t have renters insurance in the past. I said “screw it” and have went without.

Saved roughly $ 4000 there. (Although I did spend $ 250 to cut down a dead tree that might have fallen into a neighbors house)

Obviously, I own my house outright or I couldn’t go without like Im doing.

Best answer:

Answer by Essex Dan
Liability insurance should be carried in amounts large enough to protect your assets in the event you kill or injure somebody else or damage their property. It’s about responsibility.

The first two numbers “100/300” are the bodily injury limits you carry. Your insurance pays up to $ 100,000 for injury to any one person and up to $ 300,000 in total for all the injuries to all the people you injure put together. This is a reasonable (and common) amount for the average person.

The last “100” is for the $ 100,000 in property damage coverage. This is hard to hit in a two-car accident unless you total somebody’s Ferrari. It will usually be enough in any normal accident unless you cause a multi-car pileup or cause a tractor trailer truck to crash or something like that.

One consideration some people don’t think of is that the liability limits are usually tied to the uninsured motorists limits. So 100/300 on liability usually means 100/300 on your UM coverage. So if some yahoo with no insurance T-bones you and you end up in a wheelchair, you get $ 100,000 (before medical and legal providers take their cut). So say you get $ 25,000 and you have no legs. Some people are more comfortable with risk like that than others.

One thing most people should do with their auto policy but don’t is to raise their “medical payments” coverage as high as it can go. Medical payments coverage pays for medical bills for injuries you receive that are part of an automobile accident. “Automobile accident” is usually defined rather broadly so in addition to the kinds of things you would expect it would cover (ie injuries when you crash) it also covers things like injury while getting in or out of a car, loading or unloading a car, getting hit by a car while jogging, etc.. I once saw a claim for being bitten by a dog while sitting in a car. You can usually get up to $ 100,000 in MedPay coverage for a relatively small amount of money. Since being in a car accident is by far the most likely way you’re going to end up in a hospital if you’re under 45 years of age it’s a great deal for what you pay for it compared to health insurance. In most places this coverage is also PRIMARY so it comes ahead of health insurance. Not much paperwork or bills or deductibles to deal with. Just have them sent to your car insurer.

It is possible to buy too much insurance and be “insurance poor”. It’s about balancing the amount of risk you’re comfortable with against what the insurance costs. Nothing more complicated than that.

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One thought on “Q&A: What are the odds that 100/300/100 is not enough ?”

  1. Essex Dan gave you good answers. I specially support his last paragraph. My motto is buy only insurance, if you need it. To determine the need requires assessing the risk. The statistical averages as to frequency and severity of accident may be helpful, but do not provide conclusive answers. More important is the question where in your situation the greatest risk lies and to what extend you can afford to carry it. If you own an automobile which is still worth lets say $ 15,000 and you have without hardship the money to replace it, you may not take any collision insurance or take it with a high deductible. On the other hand if you are involved in an accident and the other party claims bodily injuries your risk exposure can go into 1 or more million of dollars. Even if eventually the other party does not get the full amount or any amount awarded, you need proper legal defense. You said have a house which you do not insure; maybe you can afford to take the risk on your car liability as you have taken the risk on your house. You must do the evaluation yourself, but do not just simply say “the insurance is too expensive” — ask yourself “can I effort it to be without adequate insurance?”

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