SafeAuto expands beyond state minimum auto insurance coverage
SafeAuto, an insurer that specializes in the minimum amount of auto insurance required in its 16-state territory, is expanding its insurance options.
For years, the company has catered to drivers seeking just enough insurance to meet state requirements and drive legally. Then in early 2011, SafeAuto tested policies that offered more than minimum liability coverage in Indiana. Plans are under way to introduce enhanced coverage in Ohio and other states during the coming year.
While SafeAuto will continue to offer minimum coverage, the company’s shift toward higher-coverage policies meets a change in consumer demand, says Jon Diamond, president of SafeAuto. “We are in a good position to retain this evolving customer by offering more choices and higher limits,” Diamond says.
|Clay Guida (right), a mixed martial arts fighter in the UFC, appears in an ad for SafeAuto.|
The expanded offerings will include collision and comprehensive coverage, as well as uninsured and underinsured motorist coverage. All of those types of coverage are optional.
The change – from offering minimum-only policies to what the company calls “Morenimum” policies – could affect millions of motorists.
SafeAuto’s change “may have a big effect” on its 16-state coverage area but not on other states, says Kevin Lynch, assistant professor of insurance at The American College in Bryn Mawr, Pa. “Insurance is very state-specific,” Lynch says.
After getting its start in 1993, SafeAuto has offered state minimum auto liability coverage to consumers in pockets of the United States. Today, the company operates in 16 states: Ohio, Indiana, Kentucky, Georgia, Pennsylvania, South Carolina, Tennessee, Louisiana, Mississippi, Illinois, Missouri, Arizona, Oklahoma, Texas, Kansas and Virginia.
Understanding minimum coverage
Forty-eight states require drivers to carry liability insurance; only Iowa and New Hampshire do not make it mandatory. Those 48 states also have established laws regarding the minimum amount of coverage drivers must have. Eli Lehrer, vice president of The Heartland Institute, a nonprofit research and education organization, says that in most states, the minimum coverage offers protection mainly for other drivers.
The minimum liability limit varies from state to state. To find out the minimum where you live, visit /auto-insurance-state-minimum-liability.
State insurance coverage requirements generally consist of three figures: in Indiana, for instance, state liability limits are currently set at 25/50/10, or 25,000/50,000/10,000. Here is a breakdown of what those numbers mean:
• First figure: $25,000 refers to bodily injury liability. The amount covers injuries you, as a driver or policyholder, cause to another person in a car crash.
• Second figure: $50,000 consists of bodily injury liability. This amount covers all injuries (up to $25,000 per person) in one accident.
• Third figure: $10,000 refers to property damage liability. It covers the damage or destruction you may cause to someone else’s property. In most cases, this refers to that person’s vehicle. It also could include buildings, telephone poles, fences or other structures your auto crashes into.
Drivers in Indiana looking for just the minimum coverage of 25/50/10 can find it through companies such as SafeAuto. The company now offers coverage up to 50/100/25 for motorists in Indiana.
Should you get more than the minimum?
While minimum coverage is readily available, most consumers will find more options to sift through as they look for an auto insurance policy. “Many companies sell more than just minimum coverage,” says Robert Hunter, director of insurance for the Consumer Federation of America.
Here is a list of criteria to help you decide whether minimum liability coverage is enough for your situation:
• Check your assets. Some consumers, especially those in the lower-income bracket, will find minimum coverage is their best option. “If you don’t have a lot of assets, minimum is probably fine,” Lehrer says.
• Understand the risks. For those with middle- and upper-level incomes, however, is it financially sound to drive around with just minimum coverage? “No,” says Lynch, the insurance professor. “In fact, it’s dangerous. If you’re carrying $15,000 in coverage and have to pay for a Lexus you wreck, where will the other $30,000 come from to cover it?”
• Compare companies. Regardless of whether you’re buying a minimum policy or more, you should compare your options, Hunter recommends. Start at your state’s insurance department website, where you can find information on insurers that are licensed to do business where you live.
• Ask about prices. It’s natural to assume that getting more coverage on your auto insurance policy will increase the price tag, but don’t be afraid to ask about the difference, Lynch says. If you’re a good driver with a solid record, getting more coverage may not increase your premiums dramatically. And the extra coverage may be just what you need to keep your assets how you want them: safe and sound.