I've got "State Minimum" coverages. That's enough, right?
Updated: Apr 11
By Suzette Raines Ashley, Principal Agent at Ashley Insurance Agency on April 11, 2023.
Auto insurance is a legal requirement for drivers in West Virginia, as in many other states in the US. The state has established minimum limits for auto liability insurance coverage, which are designed to protect both drivers and passengers in the event of an accident caused by you. However, these minimum limits may not be adequate to cover all losses. Sure, you’ve likely been asked for proof of insurance at various times when dealing with law enforcement or your local DMV. However, there is a big difference between meeting the State's minimum liability requirements and your actual liability if you would happen to cause a bad accident.
First, let's take a closer look at what auto liability insurance is and what it covers.
Auto liability insurance is a type of insurance that covers the costs of damage or injury caused to other people or their property in an accident that you are responsible for. The two main types of auto liability coverage are bodily injury liability and property damage liability.
Bodily injury liability covers the costs of medical expenses, lost wages, and other damages that result from injuries to other people in an accident that you caused.
Property damage liability covers the costs of repairing or replacing other people's property that was damaged in an accident that you caused.
What are the "State Minimums" in West Virginia?
In West Virginia, the minimum limits for auto liability insurance coverage are:
$25,000 for bodily injury liability per person,
$50,000 for bodily injury liability per accident,
and $25,000 for property damage liability per accident.
While these minimum limits may seem sufficient to cover most minor accidents, they can quickly become inadequate in the event of a serious accident.
How do these figures compare to actual auto costs?
As of January 2023, Kelley Blue Book shows that the average transaction price associated with new vehicle purchases is over $49,500 with a surprisingly high number of these transactions being greater than $100,000.
On average, 46,000 vehicle-related deaths occur each year in the US according to the National Safety Council. The average financial cost of each of these deaths is $1.7 million.
The average cost of non-fatal disabling injuries due to a motor vehicle accident is $98,400.
The average court-awarded settlement related to an auto accident claim is $77,600 when the claimant has legal representation.
Let's do some catastrophic math.
For example, let's say you looked down to check a notification on your phone. In doing so, you miss a sudden stop and you smash your car into the back of a 2023 Chevy Suburban filled with a youth baseball team.
If several people are seriously injured, $25,000 per person bodily injury limit may not be enough to cover all of their medical expenses and other damages.
Similarly, if the crash was significant enough to total the Suburban, the $25,000 property damage liability limit is nowhere near enough to cover the cost of repairing or replacing the vehicle.
While this scenario seems unlikely (knock on wood), accidents that result in liability payments above state minimum levels of coverage are very common.
It is important to note that if the damages caused in an accident exceed your insurance coverage limits, you may be held personally liable for the remaining costs. This means that you could be sued and forced to pay out of pocket for damages that exceed your insurance coverage limits, which can be financially devastating. This is where your own assets like your home, your savings, your retirement, and any other property would come into play to cover the remaining liabilities.
Plus, we've only talked about your liability. What about your own car? The state of West Virginia, like many other states, does not require you to insure your own vehicle.
I know what you're thinking.... "but with state minimums, I have the amount of coverage the government says I am to have." Yes, that is true. But as you can see, there is a big difference between what you're required to have and what you're likely to need.
My goodness, what do I do?
So, what can drivers do to ensure they are adequately covered? One option is to purchase higher limits of auto liability insurance coverage. Another option is to purchase additional types of insurance coverage, such as uninsured and/or underinsured motorist coverage, which can protect you if you are involved in an accident with a driver who does not have adequate insurance coverage. You might also consider personal umbrella insurance which offers an additional level of liability coverage for more than just your vehicles - it can cover your homeowners liability too.
Here's some good news: Many insurance companies offer higher limits of coverage for a relatively small increase in premium costs. A simple talk with your insurance agent could reduce or eliminate these risks for you.
The one takeaway I want you to understand from this blog post is this: if you currently only have "State Minimums", you could be very vulnerable - especially if you have a lot to lose. Increasing your limits probably isn't as expensive as you think it is. Plus, it's way cheaper than making court-ordered liability payments. If you're still asking if your State Minimums are adequate, the answer is likely a resounding "no."
While I'm glad West Virginia has passed legislation that requires a basic minimum level of automobile liability insurance, I certainly never want anyone to assume that it's enough coverage. Having adequate liability protection requires a thoughtful, personalized conversation with your insurance agent.
And if you don’t have that kind of relationship with your agent, please get in touch with one of our friendly team members at Ashley Insurance. We love helping our fellow West Virginians get the coverages they need. Get started on a quote by clicking here or by calling us at 304-927-2175.