Why does it matter if I do not have enough insurance?

This is actually a two-part question. 

First, you may not have enough liability insurance — the type of insurance that protects you in the event you cause a wreck and harm someone else.  If you don’t have enough liability insurance, then the person or persons can not only come after your insurance company, but you personally. A judgment against you could cause you to lose your personal assets.   A judgment is a big deal.  It can ruin your credit and make it difficult to rent, lease or buy a home or car.    Taking your physical assets is harder, but it can be done.   For example, in Texas, most people can’t take your homestead or garnish your wages, but someone could take your bank accounts after you deposit your paycheck.  That’s obviously a problem.
 
Second, you may not have enough coverage against uninsured/underinsured motorists. You need enough coverage to protect yourself in case you’re in a wreck someone else has caused.  When you don’t have enough coverage, any recovery you make will probably go toward paying your doctors’ and hospital bills (and often, it won’t even cover all of those). There likely won’t be enough to compensate you for your lost earnings, pain, mental anguish, impairment and the other elements of damage you’re entitled to recover. 

Other related FAQs

• Are there minimum insurance requirements in Texas?
• Do I have to have uninsured/underinsured motorist insurance?
• Do I need to buy vehicle insurance in Texas?
• Do I need uninsured motorist coverage?
• Does every driver in Texas have insurance?
• Does my insurance company automatically pay my claim if I file a UM/UIM claim?
• How many uninsured/underinsured motorists are there in Texas?
• I got a letter from an insurance company talking about a credit they are entitled to for other payments. What are they talking about?
• I was involved in a car accident recently and was injured. I do not have vehicle insurance. Am I still able to file a claim?
• I’m a good driver. Do I need insurance?
• If I am injured by a hit-and-run driver without insurance or low insurance limits, what happens?
• Is uninsured/underinsured motorist insurance expensive?
• My best friend has uninsured/underinsured coverage and says I should get it. What does that mean?
• My car insurance premiums are pretty high. How does an insurance company decide what it is going to charge me?
• There is quite a significant difference between an underinsured driver and an uninsured driver.
• What is the difference between an uninsured motorist and an underinsured motorist?
• What is Uninsured/Underinsured Motorist Coverage?
• Who does the insurance policies cover?
• Why does it matter if I do not have enough insurance?
• Why is an accident with an uninsured driver a big problem?