EN, those limits are only at or just above statutory minimums. If you have any assets, other than your house and a decent job, you need more.
Consider this: you are insuring against your own negligence OR the negligence of another driver who causes you significant injury or death. You can buy life insurance to deal with your own death if you have dependents, and the transaction is largely the same, so your uninsured/underinsured motorist coverage should match your own liability coverage to the extent possible. Its likely these are capped by the carrier either at 500K or 1M.
So here is the analysis:
What are you insuring against? Its not a typical fender bender that you are responsible for because you made a mistake, its the accident where someone is killed, or worse still from a financial perspective, severely, permanently injured. $50K is nothing in that scenario. The insurance company is going to write their $50,000 check and walk away leaving you to deal with the mess. The claimant is going to look at your attachable assets to satisfy a judgment. In Florida there is no homestead limitation so equity you have is safe. I am not sure about your retirement savings, but I doubt it is safe. Your income is not safe, and your other assets are definitely exposed.
What does it take to get out of THAT mess: When you are faced with the scenario I explained here your analysis has to be what is my exposure and what does it take to walk away from this honest mistake that killed/maimed someone. Start with an inventory with the understanding that the claimant can and will pursue all available assets and will likely want to garnish wages if its not enough. Whatever the amount of your assets plus the value of garnishment is your exposure. Here is a summary of the Florida garnishment rule:
http://www.nolo.com/legal-encyclopedia/florida-wage-garnishment-law.html When I
look at case settlement I balance the likelihood of prevailing against the recovery to come up with a value of the case. If you assume that there is a reasonable chance that you could be found liable for an accident when you go to insure yourself, you have to assume that the likelihood of the claimant prevailing is 100%. Now your offset is the cost of litigation and the value of an earlier settlement. What you want to ask is:
If I hand over my insurance can I walk away from the worst case scenario "unscathed" financially. What the heck is Paul saying? If you are fresh out of college and have no family, and no assets, its OK to get the minimum insurance as long as you understand that in an accident that injures YOU and the other driver has similar insurance, an accidnt that is THEIR FAULT (and this is me repeating myself) WHERE YOU ARE INJURED, that YOU are screwed. If you have assets, a family, and a decent job, then those limits are not adequate. If you have $1M in assets, you need limits of $1M. If you have $2m in assets, your probably need something just South of $2M in limits. Once you hit $5M in assets you A) can't easily find more limits, and B) are probably good on the exposure side unless you start driving on playgrounds.
to give a poster a reputation bump!
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