How Much Auto Insurance Should You Have, to Protect Your Family?

There were 72,117 car crashes in Minnesota in 2011, resulting in 30,295 injuries.* In 2010, Wisconsin had over 100,000 car crashes with over 40,000 injured people.** The most common reason for filing bankruptcy is medical expense. Among those people who list medical expense as their reason for filing, 78% had insurance. 60.8% of those insured had private medical insurance, as opposed to Medicare or Medicaid. What do these numbers tell us? It tells us that there often isn’t enough insurance coverage when a medical tragedy strikes a family. It also tells us that hundreds of people get injured every day in auto crashes. The above information isn’t meant to scare you—it should instead motivate you to take action to protect your family and yourself, in case of a car crash. You can do this by purchasing the right amount of auto insurance coverage.

As a personal injury attorney, I often do not talk to someone until after a crash has occurred. If I had a crystal ball, I would call many of my clients prior to their crash to tell them to increase the amount of auto insurance they carry. In Wisconsin, the minimum amount another driver has to carry in liability insurance is $25,000 per person injured, with a maximum of $50,000 for those injured in the car. That is almost nothing with today’s medical costs. Minnesota isn’t much better, as it only requires $30,000 per person and $60,000 per car as the minimum amount of liability coverage. The number one way you can protect yourself is by carrying a higher amount of underinsured coverage (and, of course, higher amounts of uninsured coverage in case the person has no insurance).

Underinsured Coverage

Underinsured coverage is insurance that kicks in when you have used up all of the at-fault party’s insurance. For example, if the person that crashed into you only has $25,000 in coverage and you have $100,000 in medical bills, you can go after your underinsured coverage once the other person’s insurance pays out its policy limits of $25,000. That means you’d better have at least $75,000 just to cover your bills. However, you will undoubtedly have a right to pain and suffering compensation, wage loss compensation, and possibly compensation for future pain and suffering and future medical costs, in addition to your medical bills of $100K. In this scenario, you should probably have at least $500,000 in individual underinsured coverage to cover your losses. That may sound like a lot, but additional underinsured coverage isn’t that much more expensive for you and your family. You should contact your insurance agent—and several other insurance companies—to get estimates of how much it will cost to have enough underinsured coverage.

Reducing Clauses (WI Only)

If you live in Wisconsin, you should be aware of the dreaded reducing clause. A recent bill passed which allows insurance companies to reduce your underinsured coverage by the amount of money you receive from the at-fault party’s insurance. Thus, in the above example, $25,000 would be taken off your underinsured coverage so you’d only have $75,000 in underinsured coverage to pay for the remainder of your medical bills. Most states do not allow reducing clauses because you pay for the full $100K of underinsured coverage but never get to use that amount. However, reducing clauses in Wisconsin are not mandatory. That means you can negotiate with insurance companies to eliminate this clause from your policy. It will likely cost you extra, but is usually well worth it, in case you ever need to use your coverage.


Medical bills these days are rising, and the amount of coverage health insurance provides seems to be shrinking. Even when a car crash is no fault of your own, your medical provider, doctor, or hospital will come after you if there is not enough insurance coverage. You cannot rely on the other guy to have enough insurance to cover your family and you. The last thing you want to worry about after your personal injury case is finished is how to pay for the rest of your medical bills. The only person you can rely on to make sure you are protected is you. Pay a few extra dollars a month for better insurance coverage and peace of mind. Hopefully, you will never have to use it. In the off chance you do, you will be much happier and a lot less stressed.

*source: The Minnesota Office of Traffic Safety
**source: The Wisconsin Department of Transportation

Attorney Michael C. Demo