Let’s face it: nobody looks forward to buying insurance. It’s not like going to the movies or buying a new pair of shoes. Buying insurance is more like paying for a prostate exam – neither the exam or paying for it was fun, but it was the right thing to do. That being said we all try to spend as little as we can on auto insurance, but pinching pennies can cost a lot in the long run.
Let’s take a look at your “Limits of Liability.” You will find it on the first page of your policy and it is usually expressed as Per person/Per accident/Property Damage. The state minimum limits in New Mexico are 25,000 per person/50,000 per accident/10,000 property damage. An insurance company cannot legally sell lower limits in New Mexico and still comply with the financial responsibility laws in the state.
What do all those numbers mean? Well if you injury someone in an accident your insurance company will pay their total medical bills, lost wages, pain and suffering, etc. up to $25,000. What if their injuries exceed the 25,000? You are responsible for the rest. Your insurance company has fulfilled their obligation and are not going to pay any more money. The same holds true for the other coverage limits: per accident and property damage.
We all know that medical costs continue to skyrocket, but lets take a look at property damage. Property values have not increased at the same rate as medical costs, but most cars are worth a whole lot more than the $10,000 minimum limit. If the $10,000 property damage limit is no longer enough then consider the skyrocketing costs of medical expense and you will see that $25,000 per person is a paltry sum.
How much does additional coverage cost? Well, on average it will cost an additional $1.00 to $3.00 per vehicle to increase coverage from the $10,000 limit to $25,000, that’s more than double the amount of insurance for the cost of a cup of coffee. In my opinion it is crazy to carry state minimum limits.
I wish the state would change the minimum limits to about $100,000 per person/$300,000 per accident/ $50,000 property damage, but if wishes were fishes…….Actually I don’t know how that ends, but I know it’s a saying.