I could never cause $100,000 of damage…. could I? Yes, and then some.
Part 4 of the Massachusetts Auto policy is Property Damage. It pays for anything you damage whether it’s another car, a fence, a fire hydrant, telephone pole or anything else. We see many polices that only have limits of $25,000 or $50,000. This is scary. Most of these people have no idea because they either bought their insurance online or they haven’t looked at their polices in a long time.
Why do we recommend limits of $250,000? In most cases it cost $3 per year (yes $3!) to increase the coverage from a $100,000 to $250,000. You could get into an accident where the claim for the damage to another vehicle, truck or trailer costs more than $100,000 to replace. It’s not unusual to see cars on the road that cost over $100,000. A typical Kenworth Tractor (vehicle that pulls a Trailer you see on the highway) cost around $150,000 never mind the Trailer and what’s inside the Trailer.
What happens if I don’t have enough coverage to pay for all the damage that I caused? Your insurance company will pay for the amount of damage up to the limit you purchased on your policy. That’s it. Then one day when you come home from work and open up your mail and there will be a bill for the difference. Not a good day. Once you call your agent and ask them how much it will cost to increase the limit to $250,000, they will tell you with a soft mumbled voice… $3 per year.
When your agent recommends coverage of $250,000 to you, they are not doing it for the extra 30 cents commission, they are doing it because it’s the right thing to do to properly to protect you and your assets.