What's at Risk with Minimum-Limit Auto Insurance?

The state mandated minimum liability limit for auto insurance in Texas is 30/60/25. What does that mean? It means these are the dollar amounts an insurance carrier will pay to another party in the event that you are at fault in an accident. Each number represents a dollar amount. The first number (30) indicates $30,000 worth of coverage for bodily injury per person, 60 means $60,000 for bodily injury per accident, and 25 signifies $25,000 for damages to someone else’s property.

The problem with 30/60/25 is that it may not be enough coverage for a major accident. Did you know that the US Department of Transportation estimates that a typical driver will have a near auto accident one to two times per month and will be in a collision every six years? The next time you’re sitting in traffic, take a look around you. An observant driver will quickly notice that most vehicles on the road are worth more than $25,000. Also, it’s important to realize that $30,000 may not be enough to cover a trip to the hospital by ambulance, diagnostic tests, surgery, and medication.

What happens when you don’t have enough coverage to pay for an accident? You could be sued by the other party or their insurance carrier and make yourself vulnerable to severe financial hardship.

There is a simple solution to avoid losing your money and property. Carry higher limits on your auto policy and an umbrella policy.

The good news is that higher liability limits and an umbrella policy are relatively inexpensive. In fact, over time, a consumer carrying 250/500/100 will enjoy paying a lower rate than the minimum limit crowd because they are considered a lower risk to a carrier.

Our mission at UFCU Insurance Services is to educate our Members. We’d like to assist you in making informed decisions that are right for you.