Each state requires you to carry a certain limit of liability on your auto policy in order to be considered legal. Liability limits in this case is specifically referring to Bodily Injury Per Person, Bodily Injury Per Accident and Property Damage Per Occurrence. Each of these is associated with a dollar amount on your declarations page which is the most that the insurance company will pay when you are at fault and cause bodily injury or property damage to another party.
In the state of Kentucky, the minimum limits you must carry are:
- $25,000 Property Damage Per Person
- $50,000 Bodily Injury Per Accident
- $10,000 Property Damage
- $60,000 Combined Single Limit Bodily Injury and Property Damage
In the industry these options are known as split limits or combined single limits. Most people have split limits. With split limits, you’ll notice Property Damage has a limit per person and also per accident. There is a limit the company will pay to individuals in the vehicle, but property damage coverage will also max out at a certain limit per accident. So, if you have an at fault accident with one person in the vehicle then that person could get up to $25,000 in bodily injury. But if you have four people in the vehicle with you, then no one person will get more than $25,000 in bodily injury coverage and the company will not pay more than $50,000 total in bodily injury for this specific accident.
Is this enough?
When trying to determine the limits you should carry there are a few factors to consider. Everyone wants to save money on their insurance and carrying minimum limits might reduce your premium but at what cost? Health care costs are always rising. If your accident results in a serious injury or death, then $25,000 in medical bills will go quickly. You might think $25,000 will be enough to cover minor injuries and that the likelihood of a serious injury or death is rare so it is worth the risk to save some money. But, when was the last time you looked at purchasing a new vehicle or had your vehicle repaired? Have you considered the cost of new vehicles or repairs lately? Repairs for a deer claim for one of our insureds who hit a deer while driving a small car was recently settled at $5,000 after the deductible was paid. Vehicles are expensive anyway you look at it. What if you are at fault in an accident with someone driving a BMW, Mercedes-Benz or Lexus?
You also need to take into account your assets. In the event of an at fault accident, insurance is typically the easiest quickest payout to make things right for the injured party. However, with minimum limits, you leave the door open to lawsuits if you own a home, vehicles, have other assets or are a higher income earner.
Our agency does not recommend minimum limits as we do not feel that this is adequate protection even for lower to average income earners. Our agents will be happy to have a discussion with you to determine what level of liability limits would make the most sense for you and provide you with adequate protection. Give us a call. We’re happy to help!
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