What Kind of Insurance Should I Have as a First Time Driver and How Much is Enough?
In this short episode of Groth Gets it! from Groth Law Accident Injury Attorneys, Jon talks what type of auto insurance you should have as a new driver. If you are fresh out of high school or college, getting off your parents insurance, or just getting your first car, getting insurance can be overwhelming. In this podcast Jon discusses what you should be taking into account when purchasing auto insurance and what is important to have in the state of Wisconsin.
You graduate from high school, you graduate from college, you get that first job, you have a great car and trying to figure out what you’re going to do next. Well, one of the things you have to get, certainly in Wisconsin, is car insurance. So when you’re out and you’re paying your own bills, what kind of insurance should you have? This is a question that I guess we haven’t really discussed it in the podcast, and certainly we haven’t discussed it at length. But I’m looking over here at a couple of our staff who are younger, certainly many people are younger than I am, but who have recently entered the workforce and they had this kind of question, “Well, what kind of insurance should I have?” And that’s a great question because you can be fully insured but not really have enough insurance. So what does it mean to be fully insured and to have enough insurance?
So if you’re going to your insurance agent and you’re talking to them on the phone, in person, or if you’re just online and you’re looking this up, they may not have all the information about what this means, to have enough insurance, so when you’re driving down the road, you feel like you are fully covered. So in Wisconsin, the minimum that you have to have is $25,000 in liability coverage. That means if you cause a crash, the insurance is going to cover up to $25,000 of the other person’s damages. That’s different than property damage. Property damage, it’s $10,000. So right now, I mean, look at that. So if you’re looking at even a used car nowadays is $10,000 enough? I think nowadays that’s pretty tough and certainly if it’s a new car, you may be suffering by not having enough insurance to pay for the property damage.
Now, let’s talk about the liability for bodily injury. If all you have is $25,000 in coverage, are you going to be able to feel comfortable that if you cause an accident and you hurt somebody else, that you’re personally not going to be on the hook for those damages? Well, I think with only $25,000, that’s cutting it pretty close and that would not make me feel comfortable because an ambulance ride can be a thousand dollars, and an ER visit can be more than that, so it might be a few thousand dollars. But what if there’s physical therapy? I’ve seen physical therapy sessions go to the tune of $5,000, $10,000, $15,000. And then if there’s an MRI involved that the other person has to have for diagnostic purposes, that can be $3,000 approximately. So you’re talking right there at almost that $25,000 limit.
Now, if somebody is Flight for Lifed, so the helicopter comes and takes them to St. Vincent or UW or Froedtert, hospitals like that, you could be talking about a $15,000 to $20,000 helicopter ride to the hospital. Now that $25,000 is totally used up by just that one helicopter ride. So that’s when you’re looking at whether you have enough insurance. You’ve got to think about the worst case scenario and that’s the reason you have insurance, right? You have it, so hopefully, you never have to use it. So if there’s the possibility and you can afford to get more than $25,000, and I would say at least $100,000 in liability, that’s probably wise.
And then look at tying in an umbrella to that, because in my opinion, that’s one of the cheapest ways to get a lot more additional coverage is if you own a home or you rent and you’re able to get an umbrella policy on top of your auto policy. That would in essence enable you to go from $100,000 in coverage to potentially a $1,100,000 in coverage or $1.1 millions in coverage by the fact of you having car insurance with that limit, renting and having renter’s insurance with an umbrella or owning a home and having homeowners with an umbrella. It’s something you need to talk to your insurance agent about because it’s so important.
And then we have to talk about medical payments coverage. So what kind of medical payments coverage should you have? Well, if you listen to one of our other recordings here, we had a little conversation about MedPay and why to have MedPay, what to use it for. So hopefully you got a little bit of information out of that. But what amount of MedPay should you have? Well, if you don’t have great health insurance, MedPay is really important after a car crash because MedPay will help you pay for your deductible. So let’s say your deductible is $5,000, then you want to have $5,000 in MedPay, so your out of pockets are very little because you can use your MedPay to pay that $5,000 deductible and then your health insurance will start kicking in at a greater amount. So that’s something to look at. I would look at your health insurance deductible first and then co-pay second to figure out what amount of MedPay you should have. So, that’s a really important thing to look at.
The last thing you want to look at is uninsured motorist coverage. So in Wisconsin, if you have car insurance, you must have uninsured motorist coverage. That’s different than underinsured motorist coverage, but it’s really important. It’s a significant difference because uninsured motorist coverage is you protecting yourself against somebody else who’s driving without car insurance. So if somebody else doesn’t have car insurance or they forgot to pay their bill or they’re driving for DoorDash, but they didn’t have a rider or they … Well, gosh, it could be something that just happened yesterday.
We had somebody who called because of a high speed chase, and the other driver who stole the car, didn’t have insurance. And our client he was a passenger in the vehicle, he didn’t have any insurance. So if they just would’ve had uninsured motorist coverage, it’d be a world of difference. Anyway, that’s important because then you’re protecting against somebody else’s irresponsibility. And again, that’s one of the basic reasons you want to get insurance is to protect yourself for the worst case scenario. So having uninsured motorist coverage, at a good amount, so what you would expect somebody else to have is what you should have your uninsured motorist coverage at. I think that should be certainly at least $100,000 and probably more. Okay. And then you want to talk to your insurance agent about tying that in with your homeowner’s insurance and your umbrella so that your umbrella then covers your uninsured motorist coverage. So instead of $100,000, you can hopefully get $1.1 million in uninsured motorist coverage.
Those are all things you should talk to your insurance agent about. If you have any questions about what kind of insurance you should have, certainly give us a ring. You can call us at (414) 999-0000 and we can give you certainly just a few minutes of our time to go over what your insurance limits are and what our advice is. And if you’re an insurance agent and you want to use us as examples, I say this all the time, I will gladly sit down and give anybody some pretty horrific stories about what kind of injuries somebody had from a crash. And because they didn’t have enough insurance, they suffered even more because the long term problems that were from the crash were never taken care of because no one had enough insurance.
And that’s just something that we literally see, probably, every single day here. That you have situations where somebody did not have enough insurance or they were told that,” Well, you’re fully covered,” and it turns out they only had the state minimum of $25,000 in coverage. It’s a significant problem that there needs to be more education about, and hopefully we’re starting that right now by getting this out there.
All right, any questions, certainly reach out and we’ll be happy to answer them as, hopefully, thoroughly and easily and understandably as possible. Thanks.