So you want to save money by lowering the Bodily Injury and/or Property Damage limits on your auto insurance policy. Someone told you, or you did some research and discovered that the minimum legal limits in Oregon are $25,000 per person and $50,000 per accident for Bodily Injury and $20,000 per accident for Property Damage. That's right, those are the legal car insurance limits in Oregon.
Ok, let's think about this for a minute. $25,000 is the maximum the insurance company will pay for Bodily Injury for someone else (not you) involved in an accident where you are driving. The maximum they will pay for the entire accident for all Bodily Injury is $50,000. If you have these minimum limits, and the Bodily Injury as a result of the accident is $75,000, you pay the extra $25,000. Most people don't want to do that.
Some think that one person will not exceed the $25,000 in an accident. Really? I recently had a customer that was hit by an uninsured driver, he had his brother in the vehicle. His coverage for Uninsured Motorist matched is Bodily Injury coverage I mentioned above. His brother was in his mid 30's. Because of where the vehicle was hit, not only was the insured injured, but so was his brother. In fact, his brother had two vertebrae in his back broken, and one of his hips. The insured was OK, after some medical and chiropractor treatment. The brother however delivered and installed wood flooring for a living. He can't do that anymore, ever. He also needs a hip replacement and due to his relatively young age, he will need two in his lifetime. $25,000 doesn't even begin to cover that, it never will. And that is the maximum under the policy, which he was paid by the insurance company. Anything above that he will have to pay for, sue the driver of the other vehicle for, or sue his brother for. This is not a good position to be in.
Same thing can apply for Property Damage. Let's say the insured hit a telephone pole instead. Those are not free. The labor to replace them is not free. If you hit a telephone pole, guard rail, fence, etc., you have to pay for the damage to be fixed. You have to pay for the telephone pole and the labor to fix it. Have you ever seen how many workers and vehicles it takes to replace a telephone pole? We all joke about it, but it is not a joke if you are paying for it. $20,000 from the insurance company, the rest is on you. Again, not a good position to be in.
If you have a non-owner's policy, or no prior insurance at all, then the state minimum is a good place to get started. However if you have prior insurance, and especially if you are a homeowner, you should have higher limits. The difference in your premium is usually not much, and you will find that after 6 months of having higher than minimum limits your rate will drop. If they don't drop with the insurance company you have, it will with other companies. The higher your limits the more responsible you are, the better "risk" you are in the "eyes" of the insurance company.
Give us a call at Pulse Insurance, or ask at your next policy renewal, what the cost will be to increase your rates to the next higher tier. We will probably quote you at higher limits anyway as it is our philosophy to protect our customers from exposure to risk if at all possible. 503-489-3143 in the Powell Vista Shopping Center at SE 182nd and SE Powell in Gresham.