Auto Insurance – Will it be there when it matters most?
Chances are one in 50 of you will be involved in a car accident this year… or almost guaranteed during your lifetime. You will then proceed with your auto insurance, confident that you have “full coverage.”
But, that’s when many people realize that the “full coverage” they thought they had can still leave them exposed to runaway medical bills, lost wages or even the expenses of another party. Before the odds catch up with you, you should know if you are covered and how best to choose a policy that will protect you when it matters most.
Do You Have the Right Coverage?
First and foremost, you need to make sure you obtain the right kind of auto insurance coverage out of the five types available – liability, collision, comprehensive, personal injury protection or “no fault insurance,” and uninsured/underinsured motorist coverage. This video does a great job distinguishing the different options:
What are Your Policy Limits? What is Uninsured/Underinsured Coverage?
As accident lawyers, we have seen firsthand how serious accidents can quickly exceed your policy limits. An example would be if you were hit by a distracted driver who was uninsured. If you only purchased the minimal amount of uninsured/underinsured coverage available in your auto insurance policy, then you may need to pay out of pocket and cover the difference.
It’s important to know that Uninsured motorist coverage is mandatory. However, UNDERinsured motorist coverage is optional. Undersinsured coverage protects the insured person and his family when an at-fault motorist does not have enough coverage to pay for all the damages and losses caused by the crash (i.e. the at-fault driver is “underinsured”, meaning he does not have enough insurance to pay for all the damages he caused to others).
At Barrow Law Firm, we strongly recommend purchasing UNDERinsured coverage up to the limits of the liability coverage that a person has on his policy. The liability coverage protects the other motorist in case we miss a stop sign, for example, and cause an accident. On the flip side, underinsured coverage protects us and our families in the event that some other motorist runs a stop sign, for example, causes an accident, but does not have enough coverage to pay for all the damages he caused.
In this example, if the at-fault motorist has only $25,000 in liability coverage, but our medical bills and related losses are $60,000, we would be limited to recovering only the $25,000 from the at-fault driver’s policy… UNLESS we have Underinsured coverage on our own policy. If it was set with a $50,000 limit, we can collect the $25,000 from the at-fault driver’s policy, PLUS additional monies from our own Underinsured coverage. The maximum amount we could recover in this example would total $75,000.00 ($25,000 from the at-fault driver’s policy, PLUS $50,000.00 from our own Underinsured coverage). So, it pays out!
In this situation and across America daily, drivers think they have “full coverage” if they have met the insurance requirements to drive a car in their state. If you already have auto insurance or are thinking about buying coverage, consider these tips:
Tips for Analyzing Your Policy or Buying New Insurance
We’ve outlined 10 very critical tips to start a review of your policy protections. Read the details of each tip in our monthly newsletter, You Should Know. (Subscribe here for these important safety updates.)
- 1. Check your liability limits
- 2. Review Personal Injury Protection (PIP)
- 3. Look Hard at Uninsured/ Underinsured Benefits
- 4. Review the “Extras”: Comprehensive and Collision
- 5. Research Your Insurance Company
- 6. Get It in Writing
- 7. Finance Your Premium
- 8. Get Accident Forgiveness
- 9. Receive All Possible Discounts
- 10. Finally, Shop Often
This is a simplified overview of auto insurance coverage. If you’ve been in an accident, please call Barrow Law Firm as soon as possible to discuss the specifics of your particular situation.