What coverage do you need?
It’s a popular idea in insurance commercials: Don’t pay for more insurance than you need. Or, only pay for what you need. Look, costs are rising on every front with no relief in sight, so reducing any bill you possibly can is a particularly enticing prospect, especially in today’s world. What does that mean, “what you need”? Minimum limits of auto insurance? Cut back on your coverage? What do and don’t you need?
Here’s the question I want to pose: who decides how much insurance you “need”, and how do you come up with the result? I know what many folks are already thinking: well, the State of South Carolina tells me I must have 25/50/25 auto insurance limits of liability, so that’s what I need.
Yes, in terms of being legally compliant, you must have 25k per person with a 50k total limit for all persons bodily injury coverage, and you must have 25k in property damage coverage. The cost of living is high enough already, so why go any further than the legal limit?
Why you need higher limits of coverage
There is no shortage of discussion on your duty to an injured third party, and how much an at-fault accident can cost in terms of injuries and property damage. Yes, there is a chance of litigation, seizure of assets, wage or tax return garnishments, etc. I hear people tell me all the time, well I’m a safe driver, I’m careful on the road, I’ve never had an accident, or I haven’t had an accident in xyz years…
Yes, we are all in survival mode, so let’s approach the subject from a more self-serving angle. You can be the world’s safest driver, but you cannot control the thousands of drivers around you on the road. And there are two coverages we need to discuss related to the risk those drivers pose to you: Uninsured Motorist (UM) and Underinsured Motorist (UIM).
Uninsured Motorist Coverage
Uninsured Motorist is pretty simple to understand: If you’re involved in an accident caused by a driver who DOES NOT have insurance, uninsured motorist coverage indemnifies you. How many people are driving around South Carolina without insurance is a difficult number to track, but depending on the estimate, it can be as many as 1 out of 4 cars on the road that have NO insurance, though more conservative estimates would put that number closer to 1 out of 7. Either way, how do you like your chances? What happens to you if an uninsured driver crashes into you? Well, your UM coverage pays for your bodily injury and property damage, up to the limits shown in your policy.
An important caveat here is that your UM and UIM coverages CANNOT exceed your liability limits. So, in order to increase your Uninsured and Underinsured coverages, you must also increase your auto insurance limits of liability to an appropriate level (thus why you need higher limits of liability!) – but let’s continue on to Underinsured Motorist coverage.
Underinsured Motorist Coverage
Underinsured Motorist is a little more complex, but similar in its execution: let’s say you were rear-ended while stopped at a traffic light. There’s really not much you can do to avoid a situation like that. But it’s ok, because that person had insurance. You’ll be fine, right? Their insurance will pay for your car, pay any medical bills you have, and you’ll be back to normal in no time!
Well, let’s assume that driver only paid for what they need: South Carolina’s required limits of liability, 25/50/25. Is that enough to make you whole? Let’s take a look at the numbers:
Property Damage
Property damage is probably the simplest part to visualize. A body shop evaluates the damage, comes up with an estimate, and your car is either fixed, or totaled. Either way, you get a check to make it right.
As of 2025, about 27% of auto accidents result in a vehicle being deemed a total loss. Well, if you’re lucky, maybe you’ve got an older vehicle, like the truck shown above. It’s not worth anywhere near $25,000, so you’re good. But are you the type who only buys vehicles new, so you don’t inherit someone else’s problem or neglectful maintenance? Or, maybe your vehicle is used, but isn’t so old.
I’ve got bad news…as of June 2025, the average new car cost $48,699. The cheapest car available new is a Nissan Versa, starting at $20,100. Is that too small for you? The Toyota Camry starts at $28,700, for a base model with no additional features. Not sure if you noticed, but that’s already more than $25,000. If you want a fully loaded Camry, the XSE trim STARTS at $34,900, but that still doesn’t account for options you might want to choose. Oh, those are just cars though. If you’re in a truck, the cheapest truck is a Ford Maverick for $29,840, and that’s a subcompact truck. If you want something bigger, the base model F150 costs $38,810. I hope somebody didn’t wreck into your Tahoe, because a base model Tahoe starts at just over $60,000.
I hope you see where we’re headed with these numbers. In the year 2025, $25k in property damage coverage just doesn’t cut it in terms of replacing a vehicle. $50k in coverage probably gets a majority of drivers into a more reasonable spot, though not everyone. Normally, it only takes a quick conversation to determine an appropriate auto insurance limit. But, property damage is the more simplistic side of things. Let’s talk bodily injury.
Bodily Injury
Let’s say you had to take an ambulance ride from the scene of the accident. That can easily cost $1,000 for basic means of care during the trip. A visit to the ER with accompanying CAT scans or X-Ray and a brief overnight stay will easily cost in the $20,000 to $25,000 range (that $25k limit already looks small!) If you escaped with only the most minor of soft tissue injuries, you might be back to normal with a couple thousand worth of physical therapy or pain management. If you’re in need of any surgical repair, get ready: a shoulder surgery costs around $15,000, and hip surgery can exceed $30,000, and that’s just costs of the procedure – after operations like these there’s often weeks or even months of follow-up care involved, at additional cost.
A good friend of mine is going through just such a thing. She’s already had one hip surgery following an accident and just finished a second surgery a year later, and that $30,000 price tag PER operation is pretty spot on. Thankfully, it appears her Underinsured Motorist coverage is sufficient to cover her costs thus far…but with the rapidly rising costs of medical care, it warrants a pointed conversation with your agent about the scenarios you might want to be covered for.
What do You Really Need?
So, from a traditional perspective, maybe you don’t have much in the way of assets that would be at stake if you were at fault in an accident – but to me, that’s hardly the most significant reason to increase your limits of coverage. Since you can’t increase your UM or UIM coverages without ALSO increasing your limits of liability, I’d argue that self-preservation is the most relevant reason to consider increasing the liability limits of your auto insurance.
Afraid that the increase in premiums you pay for your auto insurance will bankrupt you quicker than an accident would? Here at Palmetto Choice Insurance Agency, we specialize in evaluating your unique circumstances and matching you up with a policy that best protects your interests in the most economical way possible. We are a licensed insurance broker located in Spartanburg, SC – and are ready to use our expertise to help you determine what coverage you actually “need”, and do so in the most economical way possible.