The Hidden Dangers of Being Underinsured on the Road
Many drivers think their state’s minimum auto insurance limits are enough to keep them protected on the road. But the truth is, carrying minimum coverage limits may not always be enough to keep you protected in the case of a severe accident.
It’s not just about having some insurance
After securing a standard auto insurance policy, you might feel a sense of relief. After all, if you carry the state requirements, you’re covered, right? Not always. Minimum limits can be exhausted quickly if you find yourself at fault for a serious car accident or collision. If the cost of damage exceeds your policy limits, you could be responsible for covering remaining medical bills, vehicle repairs, lost wages, and even legal fees.
Auto insurance isn’t just about checking a box. It’s about making sure that if something goes wrong, you have enough financial protection to handle the unexpected. Let’s face it, accidents can happen to anyone, and sometimes at the most inconvenient times, which is why having enough coverage is crucial.
What does being “underinsured” actually mean?
Being underinsured doesn’t mean you don’t have auto insurance—it means you don’t have enough. You might have only the minimum legal limit in your state, but that limit isn’t designed to cover the full cost of every accident. Add in rising vehicle repair costs, increased medical bills, and more luxury vehicles on the road, and those standard policy limits fall short faster than ever.
2025 reports show that one in three drivers were either uninsured or underinsured in 2023. If you’re an underinsured driver, a serious accident could leave you responsible for thousands of out of pocket expenses that your insurance doesn’t cover. That kind of financial strain can have lasting effects and can quickly snowball into long-term instability.
Real life risks of being underinsured
- You could be left to cover the costs of repairs and medical expenses that result from a car accident. Vehicle repairs can cost anywhere from hundreds to thousands of dollars, depending on the damages. A single emergency room visit can cost more than you might think, and if hospitalization or rehabilitation is required, you could be looking at tens of thousands of dollars.
- You might be held responsible for the legal fees associated with the accident. If you’re sued for causing an accident and the damages surpass your policy limits, your savings and personal assets may be at risk.
- Without sufficient auto coverages, a serious accident could leave you struggling to recover—physically and financially. While coping with possible injuries, you could also be facing maxed-out credit cards and drained bank accounts. If you’re at fault, you might even be responsible for the other driver’s lost wages, all while you’re unable to work yourself.
Why minimum Auto Insurance limits may not be enough
Imagine you accidentally cause a collision at a major intersection. The other driver is injured and needs to go to the hospital. You later find out their medical bills add up to nearly $50,000, and there’s another $10,000 in damage to their vehicle.
If you only have minimum liability auto insurance limits, it might only pay for $25,000 of those medical costs and $10,000 in property damage. That means your insurance covers $35,000 total, but there’s still $25,000 left unpaid. Guess who would be responsible for the rest? You. You could be legally responsible to cover the difference out of your own pocket.
That’s why it’s so important to ensure your coverage limits are high enough; not just to meet legal requirements, but to protect against unexpected accidents.
Don’t let gaps in your coverage wreck your savings
Accidents are unpredictable, but your auto coverage doesn’t have to be. One of the smartest things you can do to make sure you aren’t caught off guard when life takes unexpected turns is to review your auto insurance coverages. A quick check today could save you from major out-of-pocket costs later.
If you have questions about your limits or want to explore additional coverage options, your local Alfa® agent is ready to help.
Not sure what your current coverages are? No problem. If you’re an Alfa customer, you can easily view your policy details and coverages anytime through your MyAlfa® account or in the Alfa2Go® mobile app.
All coverages are subject to deductibles and policy limits. This is not an insurance policy. It is intended only to provide a general description of Alfa Insurance® and/or its product lines and services. An actual policy contains the specific details of the deductibles, coverages, conditions and exclusions. Your Alfa® agent can explain the policy and benefits and answer any questions you may have before you buy.