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Personal Insurance

Less Is Definitely Not More…

By February 28, 2018No Comments

Our world is constantly moving and changing. In today’s society, busyness is the norm, gratification of our desires is expected to be instantaneous, and advertising constantly lures us into the false notion that we need more to fill our already chaotic lives. Simplicity is a beautiful concept that is quickly becoming lost in our culture. Minimalists are stepping up to say, “Enough! Less is more!” On many levels, I whole heartedly agree, especially when it comes to putting mayonnaise on a sandwich! However, when it comes to insurance, skimping on your coverages and trying to get by with the bare minimum does not play in your favor.

Insurance comes in various forms: auto, home, flood, life, umbrella, business, health, and the list goes on! Regardless of the type of insurance that you have, each policy type has a basic coverage. While that base coverage will get you by, once an accident occurs, be it from natural disaster, auto damage, or personal liability, that minimum coverage will not be adequate. This concept applies to the insurance industry in general, but let’s look more closely at auto insurance.

State minimum insurance requirements are the auto insurance requirements for each state, by law, for their residents. Each state varies in what they require their drivers to have. There are 4 basic types of coverage that may be included in state minimum car insurance requirements:

  1. Bodily injury liability
    1. This is the coverage that is defined per person and per accident
  2. Property damage liability
    1. This coverage is defined per accident
    2. Property damage covers the damages you are responsible for outside of your vehicle
  3. Personal Injury Protection (PIP or No Fault)
    1. This coverage is defined per person and per accident
    2. It may include limits for medical expenses, loss of income etc.
    3. Not available in every state
  4. Uninsured/Underinsured Motorist Protection
    1. This coverage is defined per person and per accident.

Most states only require the first two coverages mentioned above, bodily injury liability and property damage liability. Indiana state minimums are 25/50/10 and Michigan minimums are 20/40/10. The numbers represent the limits of your insurance policy. For example, Indiana state minimums translate as follows:

  • $25,000 per person for bodily injury
  • $50,000 per accident for bodily injury
  • $10,000 per accident for property damage

Phew! We made it through the numbers and details. So what does all of that mean?  The purpose of insurance is to protect your current and future assets. If you happen to get in an accident that is your fault and you don’t have enough insurance coverage to cover the damages to other people and their property, there is a possibility that you may be sued for the additional costs. Even if you don’t have many assets to speak of, your future earnings are at risk as well. I encourage you to ask yourself, “How much personal risk am I willing to take?”

The first 2 years of our marriage, my husband and I worked in ministry with inner city kids. We loved the kids and we loved being able to serve our community. That being said, working for a non- profit organization can sometimes translate to lower earnings and only 1 vehicle. We had to closely monitor our budget each month and we ate a LOT of homemade pizza bagels and PB & J. There were areas of our lives that we had to cut back on. It was hard to say no to going to the movies with friends, going on a shopping spree on a girl’s weekend, or even seeing our families multiple times a year who live far away. Money wasn’t overflowing into our bank accounts, but there were things we didn’t budge on: our insurance, placing funds in savings each month and paying off our school tuition. Our lives weren’t glamorous by any means, but the little that we had was not in danger of being taken from us due to an unplanned auto incident. We only had 1 car and it needed protection!

There are many ways to save money on your auto insurance, and your agent can help you find the most available discounts. Many people don’t know what discounts they qualify for to decrease the cost of their insurance without sacrificing quality coverage. Make sure you are adequately protected and find auto coverage that fits your budget without placing your financial future at risk. Synergy Insurance would love to help you with any questions you may have! Don’t hesitate to contact us!