State Minimum is too Minimum

We hear the commercials about carry the state minimum insurance and you are good to go.  Are you really?

Yesterday morning, a car slammed into the “grand slam” breakfast restaurant, Denny’s, in Wilkes-Barre.  Under the state minimum insurance for PA, the property damage limit is $5,000.  The property damage at Denny’s is well over the limit of $5,000.  Now what happens to the driver and Denny’s? 

Denny’s has to turn the claim into their insurance carrier for payment of the damage to the building that is over the policy limit of $5,000.  Denny’s will have to pay their deductible first. Then Denny’s insurance company on behalf of Denny’s will seek restitution for the damage from the driver. 

What does seek restitution mean? With the minimum insurance allowed by the state, the driver can be sued. The driver will go to court.  The driver will be responsible for all property damages over $5,000 including the deductible paid by Denny’s.  The magistrate will arrange payment from the driver to reimburse Denny’s insurance for the amount they paid to repair Denny’s building along with the deductible and court costs.

What if it was a car? What if there are two cars?  Let’s say the car with the state minimum insurance strikes a Mercedes that sustains over $5,000 worth of damage then the second car is strikes is a Yugo that has $3,000 worth of damage, more than the Yugo is worth.  The Mercedes would receive $5,000, the policy limit end of story, no payment for the Yugo owner.  The Yugo owner, not the insurance carrier, would sue the driver for the damages.  In the meantime, the Yugo owner has no car.  Do not forget the Mercedes; the owner will sue for payment of the damages over the $5,000 limit and court costs.  Is the state minimum insurance of $5,000 a bargain?

We have not even touched upon the liability for how many people were injured and will sue!

State minimum is too minimum; it leaves the driver and the other parties involved unprotected.  DGK recommends higher limits than the state minimum.  If an accident happens and you are at fault, we want you protected.