Mercury Insurance cites climbing bodily injury costs as catalyst for umbrella protection

According to research by Mercury Insurance, multi-vehicle crashes, dog bites, or a delivery person being injured are some of the unexpected events that put Arizonans’ financial health at risk.

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“Bodily injury payouts continue to climb year over year since the pandemic started, with the average amount for a liability claim increasing by 35%,” Mercury said in a press release.

“The recent trend of rising liability injury claims for home and auto owners that exceed traditional policy limits has moved Mercury to unveil an all-new personal umbrella insurance policy for Arizonans that offers extra protection with bolstered coverages beginning at less than $1 a day.”

Arizona is the fifth launch of Mercury’s expanded insurance product following California, Texas, Oklahoma, and Illinois.

“Unexpected accidents are becoming more costly for Arizonans, which puts them at risk of having to pay out of pocket,” said Brandt Minnich, Mercury Insurance vice president and chief sales development officer, in the release. “Mercury has redesigned its umbrella insurance to give Arizonans an extra layer of protection beyond a traditional auto or home policy. It’s an affordable safety net that protects you from these expensive accidents and litigious lawyers looking for a big payday.”

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Mercury shared a story from one of its policyholders about reevaluating insurance limits and coverages. In this policyholder’s case, he hadn’t changed his since college. Years later, he hit a moped with his vehicle, severely injuring the rider, leading to out-of-pocket damages paid by Mercury that were well beyond his auto policy limit of $25,000, Mercury said.

“He had payments deducted from his salary for a number of years until the settlement was paid off,” Minnich said.

Legislators have also stressed the necessity of proper auto insurance coverage in Virginia and North Carolina by passing laws to increase coverage requirements.

In Virginia, effective Jan. 1, 2025, liability insurance coverage requirements for injury or death of one person will increase from $30,000 to $50,000, injury or death of two or more people from $60,000 to $100,000, and property damage from $20,000 to $25,000.

The North Carolina General Assembly passed legislation to raise the minimum insurance requirement to $50,000/$100,000 beginning Jan. 1, 2025.

The Council of the District of Columbia is considering a bill that would increase the minimum auto insurance statute to $50,000/$100,000.

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The “Motor Vehicle Insurance Modernization Amendment Act of 2024,” introduced by Council Chairman Phil Mendelson, would update coverage for the first time since 1986.

“In a vehicle collision, a person may be injured and might need medical care, time off work to recover, and more,” Mendelson wrote in his bill introduction. “All the components of this recovery cost much more today than in 1986 yet the same $25,000/$50,000 minimum insurance policy will apply.

“[T]he present value of $25,000 from 1986 is $70,483 in December 2023 (Bureau of Labor Statistics) and the present value for medical care is over $117,000. This minimum coverage is not keeping pace with the Consumer Price Index (CPI) nor the actual cost of medical services.”

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