Far too often, I see clients that have purchased the minimum liability coverage in Minnesota, which is $30,000 per person and $60,000 per incident (30/60)1 for liability and $25,000 per person and $50,000 per incident (25/50)2 for Underinsured (UIM) and Uninsured (UM) motorist coverage. Generally speaking, liability coverage provides payment to an injured person in the event you cause an accident. UIM/UM coverage protects you and your family from another driver that caused an accident and either did not have coverage or did not have sufficient coverage to cover the injuries that you or your family members sustained.
As you can imagine, the ‘minimum’ requirements do not reflect the cost of medical care in today’s world in the event you injure someone (liability) or you are injured by someone who doesn’t have any insurance or enough insurance (UIM/UM). In many instances, a single surgery can eclipse the minimum limits leaving nothing remaining for additional medical treatment, wage loss, or pain and suffering. Granted, in Minnesota, we have a “no-fault” statute that requires your own auto insurance company to pay the first $20,000 in medical bills as well as the first $20,000 in wage loss. No-fault pays regardless of who is at fault for the accident. However, if you are in an accident caused by someone else, you still have the right to pursue a claim against the other party providing that you meet one of four thresholds: (1) if your medical bills are in excess of $4,000, (2) if you have a permanent injury, (3) if you have permanent disfigurement and scarring, or (4) if you are disabled for more than 60 days.
As it relates to liability coverage, unless you are judgment proof (i.e., no assets and no wages to garnish), the minimum is not adequate. A thorough analysis and discussion should be had with your insurance agent to determine what amount of liability coverage will adequately protect your assets. In addition, an umbrella policy is often a good idea as well.
For UIM/UM, consider a much higher policy. Insurance companies often sell in certain increments, such as 100/300, 250/500 or 500/1,000,000. Remember UIM/UM coverage protects you and your family from those that don’t have enough coverage or those who violate our laws and have none. You cannot control what others do, but with UIM/UM you can protect yourself from others not having adequate coverage or assets to pay for the injuries they caused.
Bird, Stevens & Borgen, P.C. is not in the business of selling insurance, but far too often folks come to us with minimum levels of coverage wishing they would have spent a few dollars more for higher levels to protect themselves. Naturally, at that point it’s too late and nothing can be done to increase the amount of coverage available. We recommend that you revisit your current insurance coverage with these thoughts in mind as there are far too many people driving on our roadways that have the minimum insurance or, worse, none at all.
1 “Each plan of reparation security shall also contain stated limited stated limits of liability, exclusive of interest and costs, with respect to each vehicle for which coverage is thereby granted, of not less than $30,000 because of bodily injury to one person in any one accident and, subject to said limit for one person, of not less than $60,000 because of injury to two or more persons in any one accident, and, if the accident has resulted in injury to or destruction of property, of not less than $10,000 beacuse of such injury to or destruction of property of others in any one accident.” Minn. Stat. s. 65B.46, subd. 3(1).
2 “No plan or reparation security may be renewed, delivered or issued for delivery, or executed in this state with respect to any motor vehicle registered or principally garaged in this state unless separate uninsured and underinsured motorist coverages are provided therein. Each coverage, at a minimum, must provide limits of $25,000 because of injury to or the death of one person in any accident and $50,000 because of injury to or death of two or more persons in any accident. In the case of injury to, or the death of, two or more persons in any accident, the amount available to any one person must not exceed the coverage limit provided for injury to, or the death of, one person in any accident.” Minn. Stat. s. 65B.49, subd. 3a(1).
