Re-posted on 7/14/18
One thing we find is many drivers focus on bodily injury, which long story short, pays for the other guys medical bills if you are at fault. But many people are underinsured for Property Damage. Property Damage is the 3rd number in the 25/50/20 numbers you see on policies. We believe increasing that last number is so important.
If you’re driving and hit someone else’s car, or property like a fence or wall, and are “at fault”, here’s what could happen. Let’s say you hit someone that owns a 2016 Honda HR-V, and it turns out that the damage totals his car worth $26,000, plus the brick wall you hit needs to get repaired which is estimated to be $2,000. If you have the bare minimum (Nevada requires 25/50/20), the 3rd number being 20 which means $20,000 dollars; is $20,000 going to cover your $28,000 accident? $26,000 for the Honda and $2000 for the brick wall.
Using that same scenario with a different driver, with better coverage. The 2nd driver that has 100/300/50 insurance coverage and will be in the clear. He’s not concerned at all, but the 1st driver has something to be concerned about. Remember, you are at fault. It’s ultimately up to you financially, to bring the other driver back to pre-accident condition in every way.
What if the scenario is a little different? What if you hit a 2017 BMW 5 Series 530i Sedan that starts around $51,200, plus add in the $2,000 brick wall you took out. You are in it $53,200. If you are the 100/300/50 driver, you’d be $3,200 upside down in this scenario, and the first driver with 25/50/20, they’re upside down $33,200! Ouch! Even being upside down for $3,000 dollars is no pocket change. Here’s what we suggest.
For just a little bit more coverage, (which is really not that much more money added to your premium), you could significantly reduce your chances of being sued because you don’t have enough property coverage on your insurance policy. You can’t control who you may have an accident with. That’s why they call it an accident, right? You can’t control who you hit. It may be a $5,000 car or a $51,200 car, or more! It is a very smart idea to speak to your agent about having enough property damage in your coverage. Bump up that 3rd number to cover the more expensive cars that are all around us on the roads these days. Especially in Nevada where nearly 85% of people involved in accidents end up calling a lawyer!