Biggest mistake in chosing insurance limits.

The largest cost per thousand in your auto and home liability insurance is the first level of protection. Each added level is usually less expensive than the last and gives you more protection for the money you spend. Almost everyone I have insured was underinsured before insuring with me and Farmers. For most customers, the least expensive is the $1,000,000.00 Personal Liability Umbrella Policy.

The biggest mistake people make is not taking enough liability protection and carrying low deductibles for damage to their vehicles. This is especially true for homeowners or those with substantial assets. If you lose a few hundred dollars more in deductibles you can recover fast. If you lose a few hundred thousand dollars, due to injury to others, with low liability limits, it may take forever. You may be forced to pay 20% of your gross income until a judgement is paid off. And you cannot declare bankruptcy to get out of it. In most cases $100,000 per person, $300,000 per occurrence with $50,000 property damage and no deductible comprehensive, $200 deductible collision is MORE expensive than $500,000 per person/occurrence bodily injury with $500,000 property damage and $250D comprehensive, $750D Collision. Many insurers discourage you from carrying adequate protection. Less risk to the insurer.

Can an Umbrella policy make a really make a difference? Well, imagine the attorney for the widow of the deceased: There is a cash offer on the table for $1,500,000.00, because the at fault person had one million dollars in their Umbrella policy plus $500,000 in their Auto. If he convinces the client to settle, he gets $500,000 cash! If they go to trial it could last 3-6 years, and the witness or plaintiff could die. What would you advise your client to do if you were the attorney?

If there was $100,000 liability and the medical insurance for the injured took the first $63,000 under their "subrogation rights" this would leave just $37,000 for the widow. Wouldn't you be advising her to go after the assets of the other person? This could put the driver of the other car in financial disaster.
Which driver would you rather be? The one with $100,000 insurance or the one with$500,000?

Don't let a greedy insurance cmpany or an uneducated insurance agent convince you to underinsure.

Chicago area residents may contact Jon Wilcox, Farmers Insurance, in Downers Grove. 630-515-0040