Insurance 101:

How much insurance do I need for my car?

Personal auto insurance is sometimes the least understood concept when purchasing insurance for your vehicle. Over the next several weeks, we will give you insight to be better-educated buyers for your auto insurance.  

If you are ever passing through Bulverde or anywhere in the state of Texas, you will see helpful signs from attorneys, asking you if you “Have been in an accident?” If you are wealthy or of hig- net worth those signs are a warning that you should be properly insured.

BI (Bodily Injury) / PD (Property Damage) liability pays up to the limits of your policy, should you be deemed at fault if someone was injured or killed from an auto accident.  In Texas you are required to carry liability for your vehicle; the minimum state limits are 30/60/25.  Many times, companies and agents will write very low limits in order for lower premiums costs, but at Twin Creek Insurance we believe in purchasing higher limits such as 50/100/50, 100/300/100 or 250/500/100 to protect your assets.  Choosing the proper coverages and levels is one of the most important parts of purchasing car insurance.  

Let’s talk about what the three numbers represent for your liability limits. 

The first two numbers represent the highest monetary amount that your insurance company will pay if someone is injured.  The third number represents the property damage caused by the accident.  Let’s use the example of BI/PD limits of 100/300/100.

  •  100 is a $100,000 individual payout limit for each person’s medical bills, legal settlements in an accident.  
  •  300 or $300,000 represents the overall total bodily injury limit for the total number of people injured by you in an accident.  If the total amount of their medical bills exceeds your limits, then they may also come after you personally for this money.  
  •  100 is $100,000 for property damage caused during an accident.  For example, if you collide with another vehicle and it’s your fault, it is this coverage that pays for the others person’s auto repair or replacement.    

UM/IUM is uninsured motorist coverage will pay you, a family member or a designated driver that is hit by an uninsured or under-insured motorist for injuries and property damage caused from your own insurance company.  According to Texas Department of Insurance at least 20% of Texas motorists are uninsured driving our Texas roads.  

Stay safe Texans!  Next week we will look into Compressive and Collision deductibles.