I’m assuming you’ve seen “Justin Case” from SafeAuto or the horribly digitized midget General on TV a time or two. Their biggest claim to fame is State Minimum coverage. Well, what is state minimum coverage? The liability limits required to drive legally in PA is $15,000 per person and $30,000 per accident for bodily injury (if you hit me or others with your car and I/we am physically injured) and $5,000 for property damage (you hit my car, house, a guide rail).
Now let those limits simmer a bit before I go on…. Simmering…. Simmering…. Let’s make this practical for you now. My brother was in a car accident back in 2000. The car was totaled and he had to be life-flighted to Pittsburgh from Clarion…that was $8,000 alone. Then he was in ICU for a week AND in occupational rehab for 2 weeks. The claim came to around $90-$100,000. Now again, let that simmer. Why would you want to risk all you own, all that you worked for to save, what, maybe $50 per year? That number could actually be less or even at a savings – there are big nerdy mathematical and statistical reasons for this that I’d rather not bore you with! We at Barr’s Insurance put our coverage minimum $100/$300/$100, for obvious reasons as you can see. I quoted myself with state minimums compared to our liability limits and there was a $40 per year difference – and I know I’ll sweat less if I’m in an accident!
Now let’s go legal insurance blogger on you for a second (note: I’m not a laywer)! PA is a Joint & Several Liability State. What does that mean? Instead of putting you to sleep with legalese, here is the short definition. “In a multiple defendant situation (you get into an accident with multiple people) you as the defendant with even 1% liability you could be required to pay the entire verdict! SO… let’s have one more simmering of this information…. The entire verdict! Legal fees alone can be up to $25,000 – state minimums wouldn’t even cover your lawyer fee! Did you know that if you can’t pay the fees and/or verdict a lien can be put against your house, car, or other assets? Try getting a second mortgage to pay some bills off or that new sports car or how about college for the kids? For being only a 4 letter word, a lien is a huge problem for those with them!
Now, I realize that there are people out there that may want to use the previously mentioned companies or the questionable thinking of state minimums. This blog isn’t meant to insult a company; they are in business for a market that has a need. This is to let you know that state minimums, even with a potential small savings, may not be the way to go, especially if you don’t want to watch your assets and everything you worked for be flushed down the proverbial drain.