How much auto insurance do you really need? (P.S. I don’t sell insurance for a living)

The Legal Point

A new car is much pricier in 2021 than it was in 1975. A trip to the emergency room also costs much more than it did in 1975. 1975 — that is the year in which Virginia’s General Assembly last increased the required minimum amount of liability coverage for an automobile. Things have changed a lot since then. Whether you are buying from Flo, the Gecko or hope you are “in good hands,” here is what you need to know about buying automobile insurance coverage.

Each time you purchase an auto policy, or you renew your policy, you receive in the mail a sheet with a listing of coverage amounts often titled “Personal Auto Policy.” This is your Declaration of Coverage sheet, sometimes referred to in the insurance biz as a “dec sheet.”

You will see a listing for “Bodily Injury Liability” as well as “Property Damage Liability.” This coverage applies when you cause an accident and injure someone else or damage someone else’s property. If you have the minimum amount required by law, it will read “$25,000 each person/$50,000 each accident.” In that case, the insurance company will pay out no more than $25,000 to each person that you—or, someone driving your car with your permission—have injured. And, if you cause a collision involving more than one person, the insurance company will pay no more than $50,000 for the whole fracas. What if you are sued for more than $25,000? What if it costs more than $25,000 to buy the other driver a new car? In both scenarios, you’re on the hook personally. After the stated amount of coverage, you are no longer “in good hands”—you’re on your own.

When you register your car with the DMV, you must either certify that you have insurance with the required minimum amount of liability coverage or pay the uninsured motorist fee of $500. That 500 bucks affords no coverage to anyone whatsoever. The required minimum is only $25,000, harkening back to 1975. The average price for a new car in 1975 was $4,950. Your $25,000 went much farther in those days.

I recommend that people have coverage of at least either $250,000 or $300,000. Different insurance companies stagger the amounts in different ways. You will find that the difference in premium is not appreciably higher, considering the peace of mind that you will have. Personally, I have $500,000 in automobile liability coverage.

These coverage amounts not only protect you in the event that you are sued. They also protect you in the event that you have to sue someone else. By law, insurance companies must offer you coverage for Uninsured Motorist protection (UM coverage) for the same amount of liability coverage that is shown on your policy. This applies if someone hits you who does not have any coverage (e.g., one of these jokers who simply pays the $500 DMV fee referenced above). But it also applies if someone hits you who does not have enough coverage (e.g., someone who did not read this article and still has a $25,000 policy). An example will help:

Bob is rear-ended by Jim, and Bob is seriously injured. Jim has liability coverage of $25,000. Bob, however, has coverage in the amount of $100,000. In this scenario, Jim’s insurance company would pay the first $25,000 and then Bob’s own insurance would have an additional amount of $75,000 for Bob to tap into.

In the scenario above, thank goodness Bob had more coverage, even if it was his own. This is called underinsured coverage (or, UIM coverage), when the at-fault driver’s insurance coverage simply is not enough to compensate you. You then have additional coverage through your own policy.

Bills have been introduced nine separate times in the General Assembly over the years to increase the required minimum from $25,000. All of those bills have failed, except this year in which Senate Bill 1182, sponsored by Sen. Scott Surovell (Mount Vernon), has now passed the Senate and is on to the House of Delegates for a vote. That bill, however, only takes the required minimum amount from $25,000 up to $50,000. Yes, $50,000 is better, but it is still not as high as I would recommend. As I say in the title, I don’t sell insurance for a living, but I do know when you need it. As someone who handles automobile accident cases every day, take it from me, Mr. Mayhem is out there. And he probably only has minimum limits on his car.

About Joe Verser 16 Articles
Joe Verser is a partner in the law firm of Heath, Overbey, Verser & Old, PLC ( He regularly represents both commercial and residential contractors in disputes, as well as homeowners and project owners. He can be reached at or at 757-599-0734.

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