Are Mandatory Insurance Minimums Enough?

No, absolutely not. I am not going to dance around the issue. Washington State mandatory minimums of $25,000 are not enough.  

I have clients come into my office every week, it seems, with injuries greater than the state mandatory minimums. They ask me what can be done and I have to tell them we’ve done an asset search on the defendant and there is no additional recovery. “But my 7-day stay in the hospital for my shattered leg cost over $200,000,” says my client. I wish I could have showed him a picture of an external fixator when he was buying the insurance.

This is especially the case if you ride a motorcycle. I recommend at least $100,000 in coverage (liability and uninsured/underinsured motorist coverage) for your auto and triple that if you ride a motorcycle. The cost to increase your coverage may be as little as $20 more a month for the additional coverage, depending on your driving record and other risk factors. (If your record is spotless, you may even be able to get maximum coverage and an umbrella policy for just a few dollars more.)

This leads to the question of mandatory minimums, which I will be answering in another post. If the state sets minimums, and the minimums aren’t adequate, why not set them higher? The answer is simple: there are a lot of people who can only afford the least amount of insurance required by law, and state would rather those people have a minimum amount than no insurance at all. In my experience, the minimum insurance group includes young drivers (who might say “I can’t believe my insurance costs more than my car!”), people with extensive criminal history (they aren’t part of the system), drivers with no assets, or otherwise unsafe drivers – in other words, according to Murphy’s Law, the type of person that could be crashing into you sometime soon.

Some insurance companies acknowledge this and rarely sell minimum policies. Yes, they are probably getting a better commission, but you are also better protected. If you disagree that more insurance is better, you may want spend some time checking the cost of surgery, like a cervical fusion.