Some people seem able to traipse through life doing only the bare minimum. But while aspiring only to the mediocre may allow you to enjoy, say, "The Hangover Part III," it could cause more than a bad headache when it comes to state-mandated auto-insurance coverage. Do you carry more than the minimum required by the state you live in?
When Ohio earlier this year hiked its state-mandated minimum for auto-insurance coverage by as much as triple after nearly a half-century at the same level, it wasn't as big a deal as it sounds. At that time only a small fraction of legally insured Ohioans carried the minimum of $12,500 for bodily injury of one person hurt in an accident, $25,000 for all other injuries and $7,500 for property damage — commonly denoted as 12.5/25/7.5.
Those sums went a lot further in covering drivers, passengers and cars back in 1969 when they were enacted, but chances of replacing a new vehicle for $7,500 today aren't great. Ohio's new minimum, which took effect in March with a nine-month grace period, according to the Cleveland Plain Dealer, increased coverage to 25/50/25. Similarly, legislators in Illinois last month passed a bill that, if signed by Gov. Pat Quinn, will raise its coverage minimums for the first time in two-dozen years to 25/50/20 starting in 2015 (up from 20/40/15), according to the Chicago Tribune.
While those figures measure up more favorably in 2013 dollars, they're still well-below insurance-industry recommendations. According to the Insurance Information Institute, drivers should carry at least $100,000 in bodily injury protection and $300,000 per accident. However, consumer advocates in both states have argued that resulting increases in drivers' insurance premiums — expected to be at least 25% in Ohio and about $75 a year in Illinois — will cause people already having trouble making ends meet to drop insurance altogether and drive illegally, as a reported 11% of Ohio drivers already do.
The new standards take both Ohio and Illinois from the bottom half among U.S. states to the top half, all of which have a mandated minimum of more than $30,000 per coverage type when the three types (one person/multiple people/property) are averaged. Thirteen states currently require an average of roughly $33,000 for each, the largest single group, while 11 more require about $28,000. To find out your state's minimum mandated coverage, click here.
Here are some other fun facts about state-minimum auto insurance: