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The Case Againt State Minimums

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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.

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