Understanding Car Insurance Policies
What is Car Insurance?
Generally, when you ask someone about their car insurance policy they will simply tell you if they have full coverage or liability insurance. Unfortunately, for someone injured in an auto accident this is the least important part of the policy.
If you ask the same question of most attorneys, they answer with a set of numbers. The numbers they are referring to are their insurance policy limits This means the maximum amount their insurance company will pay if they are involved in an accident. They might give an answer like $300,000/$500,000 for bodily injury and $300,000 for property damage.
The reason they give two numbers is insurance companies’ cap how much they will pay for the injuries of a single person and how much they will pay for the entire accident.
What is the Minimum Insurance Required by Kentucky Law?
Kentucky Revised Statute 304.39-110 requires that drivers in Kentucky have a minimum insurance policy. This policy must provide at least $25,000/$50,000 for bodily injury and $10,000 for property damage. These limits were set decades ago at a time where this could reasonably be expected to cover the cost of most car wrecks. Now rather minor car accidents can result in medical expenses in excess of $25,000. And the amount of coverage required by law hasn’t been raised to match inflation.
Why Do I Need More than Minimum Coverage In KY?
There are two reasons to carry more than minimum coverage.
- The first and more altruistic reason is a moral argument. If you hurt someone in a car accident you have a moral obligation to try to make them whole. That means providing for their medical expenses. As well as compensating them for their lost wages and their pain and suffering. After all, if the shoe were on the other foot and someone had caused you serious harm in a auto wreck you would want them to take care of you as well.
- The second reason is more pragmatic. If you are driving around with minimum coverage and cause an accident that leads to serious injuries your personal assets are at stake. If the injured driver decides the amount of your insurance policy is insufficient, they can sue you. Then they can use your personal assets to compensate them for the costs of their injuries that went unpaid by your insurance company. This doesn’t happen often, but if it does your insurance company is only required to pay the amount the policy is worth (i.e. your policy limits).
How Much Auto Insurance Do I Actually Need In KY?
This is a personal questions that no one can really answer for you. At the very least it is advisable to carry a $100,000/$300,000 policy for bodily injury. And when you look at the price of new vehicles these days you are probably going to want to have at least $100,000 in property damage coverage as well.
One thing to note before closing is you would be surprised at how inexpensive additional coverage is. In the past I’ve counsel friends and family about these issues. When they followed my recommendations they were only spending a few dollars more each month. And if you decide to make changes to your insurance policy make sure you talk to your agent about Uninsured Motorist Coverage (UM), Underinsured Motorist Coverage (UIM) and Personal Injury Protection (PIP) limits. Unfortunately, the majority of people out there have minimum coverage and if you are ever hurt in an accident you will certainly be grateful to have UM, UIM and PIP.