Like a lot of things in life, most people don’t learn about their own auto insurance coverages until after an auto accident occurs, and oftentimes that is too late. From the perspective of a personal injury lawyer, here are some of the key things you need to know as it relates to bodily injury insurance coverage:
Having “Full Coverage” Doesn’t Really Mean Anything: In speaking with new clients involved in serious car crashes, we often hear the client say that he or she has “full coverage” when discussing the insurance situation. Unfortunately, “full coverage” really doesn’t tell us anything about the insurance situation. In fact, we don’t know what “full coverage” even means. As it relates to bodily injury coverage, we recommend consulting your agent on what coverage you have that protects you in an accident where someone gets hurts and how much is the coverage. You also need to know what coverages you have to protect yourself when you get hurt in a crash, such as uninsured/underinsured motorist coverage and medical payments coverage, as well as the amounts of those coverages.
Liability Coverage is Really Important: You need to know how much liability coverage you have because that is your main financial protection in the event that you cause a crash where someone is severely injured. Remember that your insurance company is only obligated to pay a claim up to your liability coverage limit. For example, let’s say you have $100,000 in per person liability coverage. If you cause a crash where another person is killed or suffers debilitating injuries, that $100,000 is not going to be enough to cover the claim, and you are personally exposed for every dollar beyond the $100,000 policy limit. So when an insurance agent claims to be saving you money on your insurance, be sure to look closely at the liability limit in the quote and take time to consider whether that is sufficient protection based on your financial situation and risk tolerance.
Buy Good Uninsured/Underinsured Coverage: Uninsured/Underinsured motorist coverage protects you when someone with no insurance or inadequate insurance causes injury to you in a crash. A good number of very serious crashes are caused by irresponsible drivers who are equally irresponsible when it comes to buying insurance. Buying good uninsured/underinsured motorist coverage allows you to control the insurance situation if you get into a severe accident as opposed to hoping the person who caused the crash has good insurance.
You May Be Able to Save Money on Medical Payments Coverage: Medical payments coverage is no-fault insurance that is supposed to help cover your medical expenses from an auto accident. However, the most common medical payment coverage amount is $5,000. Occasionally, we see people have $25,000 or more in medical payments coverage. If you have reasonably good health insurance, we generally do not think it is necessary to have a significant amount of medical payment coverage on your policy because your health insurance will cover accident-related bills. If you are looking to save money on your auto policy, cutting your medical payment coverage is a much better option in our opinion than cutting your liability or uninsured/underinsured coverage.
Strongly Consider Buying an Umbrella Policy: Umbrella policies generally don’t cost very much. We strongly encourage my friends and family to purchase an umbrella policy. If you do purchase one, be sure to specifically tell your agent that the umbrella policy must provide uninsured/underinsured coverage as a lot of insurance companies try to avoid providing this coverage in umbrella policies.