suggested auto liability levels?

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spammagnet
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suggested auto liability levels?

Post by spammagnet »

We're supporting our college student son completely now, including a car and auto insurance. He graduates in May and starts a new job (school teacher) in August. We'll complete our financial separation after he has a couple paychecks. That includes putting the car (2010 Nissan Sentra in good condition) in his name. At that point he becomes responsible for insurance.

His net worth when he starts will be about half a year's salary in cash, plus the used car owned free and clear. He's single with no dependents and no debt. Other than personal effects, he has nothing to lose except the car. Housing will be rental.

What does this group recommend for insurance levels? He'll have health insurance through his employer.

Thanks
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Nate79
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Re: suggested auto liability levels?

Post by Nate79 »

He has more than a car to lose. He has future wages that can be garnished to pay a liability claim.
kenner
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Re: suggested auto liability levels?

Post by kenner »

Nate79 wrote:He has more than a car to lose. He has future wages that can be garnished to pay a liability claim.
Moreover, if applicable state law follows the doctrine of vicarious liability, the car's owners of record at the time of an accident (it sounds like that may be you at least until August or later) may be held liable for damages caused by a driver who operates the vehicle with your permission, express or implied.

Juries and courts award damages based on proof of liability and amount of injury and damages caused, not based on ability to pay a final judgment.
Topic Author
spammagnet
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Re: suggested auto liability levels?

Post by spammagnet »

Okay. So how much insurance should be carry?

As to current liability, I'm well insured. This question regards my son's insurance, not mine.
kenner
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Re: suggested auto liability levels?

Post by kenner »

spammagnet wrote:Okay. So how much insurance should be carry?

As to current liability, I'm well insured. This question regards my son's insurance, not mine.
The correct answer is that enough insurance should be carried to cover any potential liability. But, of course, that is impossible to predict ahead of time.

I come from a family of educators - and not one of them has ever caused a motor vehicle accident that injured another person. I imagine your son is similarly responsible. I'd suggest $100,000/$300,000/$50,000
liability/uninsured motorist coverage/property damage. Hopefully, that is affordable in your state.

But, again, it may be important to consider applicable law in order to protect your son and yourself.

Statistically, last time I checked, the vast majority of liability claims across the nation are under $100,000/$300,000/$50,000.
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spammagnet
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Re: suggested auto liability levels?

Post by spammagnet »

kenner wrote:I come from a family of educators - and not one of them has ever caused a motor vehicle accident that injured another person. I imagine your son is similarly responsible.
He is a responsible person and not a reckless driver but accidents do happen.

Thanks for the concrete answer.
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dwickenh
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Re: suggested auto liability levels?

Post by dwickenh »

I agree that 100/300 liability for Bodily Injury would be prudent for your son. I would suggest a minimum of 100,000 for property damage as there are plenty of 50,000 plus vehicles on the road. Also stoplights and buildings are not getting any cheaper.

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
furwut
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Re: suggested auto liability levels?

Post by furwut »

I have a family member who inherited a judgement award from her deceased brother stemmimg from an auto accident caused by an indigent driver. The driver was never able to pay any damages but he did inherit a house at some point. So my family member put a lien on the house. When the driver finally passed she got the house.

So there no such thing as being judgement proof unless your life's ambition is to always be poor.
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BolderBoy
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Re: suggested auto liability levels?

Post by BolderBoy »

dwickenh wrote:I agree that 100/300 liability for Bodily Injury would be prudent for your son. I would suggest a minimum of 100,000 for property damage as there are plenty of 50,000 plus vehicles on the road. Also stoplights and buildings are not getting any cheaper.
Agree. At least $100k property damage insurance.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
Topic Author
spammagnet
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Re: suggested auto liability levels?

Post by spammagnet »

I'll pass on the recommendation for 100/300/100. Thanks for your collective wisdom.
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bottlecap
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Re: suggested auto liability levels?

Post by bottlecap »

spammagnet wrote:I'll pass on the recommendation for 100/300/100. Thanks for your collective wisdom.
He needs to worry about being the one injured and the other driver only having minimum coverage. He should should consider high UM/UIM and possibly an umbrella that will cover him.

In some states, it is estimated that as many as 30% of drivers are uninsured. If that is indeed the case, I would imagine that another 40 or 50% probably only have minimum coverage.

JT
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spammagnet
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Re: suggested auto liability levels?

Post by spammagnet »

bottlecap wrote:He needs to worry about being the one injured and the other driver only having minimum coverage. He should should consider high UM/UIM and possibly an umbrella that will cover him.
Thanks for your suggestion. I didn't state that but I intended to suggest UM/UIM matching his liability coverage. So, it's really 100/300/100/100/300.
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ram
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Re: suggested auto liability levels?

Post by ram »

When I was a physician in training I had an income somewhat less than a typical school teacher. I carried 300/ 100 insurance at that time.
Ram
badger42
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Re: suggested auto liability levels?

Post by badger42 »

I'd see what the price jump is to go to 250/500/100 vs 100/300/100 - last time I priced such things (a number of years ago) it was something like 20 bucks a year.

I'll second the 100k property damage at a minimum. What happens if you hit a Tesla?
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