Mississippi, currently the state with the lowest minimum vehicle insurance liability limits in the country, will soon raise those limits, and therefore the cost, of insurance. Motor vehicle liability insurance coverage is mandated by the state of Mississippi. Earlier this year, the state legislature passed House Bill 722, which, effective January 1, 2006, will raise the minimum liability limits from 10/20/5 to 25/50/25.
The Progressive Group of Insurance Companies, the third largest auto insurance group in the U.S. and in Mississippi, understands the new state law may cause confusion and wants to help drivers better understand what this change means to them.
What Is It?
Bodily Injury and Property Damage liability (BI/PD) covers your legal liability, up to the dollar limits you select when you buy a policy, for an accident in which there is damage or injury to someone else. Claims paid out under this coverage can include the other person’s medical bills as well as repairs to the other person’s property, such as a fence or their vehicle.
BI/PD limits generally appear on a policy as three numbers in a row. In Mississippi today, the minimum limits are 10/20/5. If you’ve chosen these limits, your insurance company will pay $10,000 for bodily injury per person involved in a claim, $20,000 for bodily injury per accident (the maximum that would be paid out under this coverage on a claim) and $5,000 for property damage liability.
Effective January 1, the minimum limits in Mississippi will increase to 25/50/25, which more than doubles the minimum limits available today, increasing the amount paid out by insurers and raising the cost of existing policies that have BI/PD limits less than the new minimum limits.
Though not intended, this change may also increase the number of uninsured drivers on the road in Mississippi, as vehicle insurance becomes more expensive. This legislative change does not affect Comprehensive, Collision or Medical Payments coverage.
Are You Affected?
You’re affected by this change in minimum limits if your current vehicle insurance policy has BI/PD limits of anything less than 25/50/25.
In Mississippi, you may also be affected if you purchase optional Uninsured Motorist/Underinsured Motorist (UM/UIM) liability insurance, which protects you if you get into an accident with a driver who does not have any insurance or enough insurance to cover the loss. The UM/UIM limits you select can be less than or equal to your BI/PD limits. If your UM and UIM limits are currently below the new minimum limits, they will be increased at your next renewal.
“Car insurance is complicated, so we want to help Mississippi drivers better understand what this change means for them,” said Brad Granger, product manager, Drive Insurance from Progressive. “If you have vehicle insurance liability limits less than the new minimum of 25/50/25, you will most likely pay more for your policy at your next renewal. How much more you will pay depends on three things: Your current level of liability limits, the new limits you choose — you can choose the new minimum limits or an amount greater than the new minimum limits — and the coverages you buy.”
When Does The Change Go Into Effect?
“All Mississippi drivers’ policies will not change automatically on January 1st,” said Sanjay Vyas, product manager, Progressive Direct. “However, if you currently have BI/PD limits lower than the new minimum limits, when your policy comes up for renewal after January 1st it will automatically be changed to have the new minimum limits. And, if you buy a new policy after January 1st, you’ll automatically be offered the new limits.”
What Should You Do?
Here are six steps you can take to prepare:
1. Look at your current insurance policy to determine if you’re affected by the change. Remember — you’ll be affected if your current BI/PD liability limits are anything less than 25/50/25.
2. If you purchased optional Uninsured/Underinsured Motorists liability, remember that those limits must be equal to or less than your BI/PD limits.
3. If you’re affected, understand when your policy renews so you can plan for a potential increase in premium.
4. You should receive your renewal bill, along with a letter alerting you to the change in limits, about 30 days in advance of your next renewal. When you receive your bill, look to see how much it has increased.
5. Seriously consider buying optional Uninsured/Underinsured Motorist coverage. This coverage protects you from damages caused by drivers who are uninsured or who are underinsured, that is, who do not carry sufficient liability insurance to cover damages caused.
6. Take some time to shop around — insurance rates vary widely from company to company — if you shop around you could save money by switching to a new company.
The Progressive Group of Insurance Companies, in business since 1937, ranks third in the nation for auto insurance based on premiums written and provides drivers with competitive rates and 24/7, in-person and online service. The Drive(R) Group of Progressive Insurance Companies offers insurance through more than 30,000 independent insurance agencies that market their products and services through the Drive Insurance from Progressive brand. For more information, go to http://www.driveinsurance.com. The products and services of the Progressive Direct Group of Insurance Companies are marketed directly to consumers by phone at 1-800-PROGRESSIVE and online at http://www.progressivedirect.com through the Progressive Direct(SM) brand. The Common Shares of the Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR. More information can be found at http://www.progressive.com.
Editor’s note: Sample rates from Drive Insurance from Progressive and Progressive Direct are available upon request.