Ensuring you're properly insured

By Dave Hamby

So you’ve changed your oil, checked your cooling system, set your tires to their proper pressure, washed and waxed your car and gone to great lengths to make certain your vehicle is in need of nothing for the long hot summer. You’re set to go and there’s nothing to worry about, right? Well maybe. Have you checked your insurance lately?

 The fact is, about 20% of the motorists driving around with insurance in effect are under-insured. Texas law requires a minimum liability of $20,000 for each instance of personal injury, $40,000 total for personal injury, and $15,000 for property damage. I’ll bet you didn’t know that when this law was written you could but a brand new Ford pickup truck for under $3,000 and a brand new Toyota for under $2,000. You can’t get a new Ford pickup or Toyota today for the amount of property liability Texas law requires. Imagine what would happen if you had this minimum insurance and you totaled a new Mercedes or Lexus.

 When you think about the costs of emergency medical care today you’ll quickly realize that the $20,000 minimum liability for personal injury won’t pay for much. Add in the fact that if you’re at fault in an accident and someone is injured, you’ll be paying for a lawyer, lost wages, pain and suffering, any extra care, and anything else the lawyer can charge you with. That $20,000 will be gone in the blink of an eye.

 So you ask, "Who’ll pay for the extra expenses?" The answer is, you will.

 While it’s true that you can’t get blood out of a turnip, with today’s laws and the ability of computers to instantly re-file judgments and determine anyone’s worth, you can get something that closely resembles blood.

 If you have a judgment entered against you and you have any savings or investments, they’ll go toward the judgment. If you have any property except for your home, it’ll go toward the judgment. If you don’t have anything, the judgment will stay in effect until it’s satisfied. This means you’ll never have anything. If you win the lottery, it goes toward the judgment. If you inherit some money or property, it goes toward the judgment. Unless you die young and poor, that judgment is going to get paid.

How much does it cost to get that extra insurance? For most people we’re only talking about an extra $5 a month or so. Younger drivers and higher risks will have to pay more, but what’s your future worth?

Give your agent a call and ask how much it’ll cost to give your insurance a tune up. Many people driving around with minimum liability have collision insurance with $50 or $100 deductible. You can change the deductible to a higher amount like $500 or $1,000 and the savings will more than offset the cost of the extra liability coverage. If your lending institution squawks about these high deductibles, you can put that amount in a savings account to cover an accident loss and not only save on your insurance costs, you’ll start saving for your future.