By Damian Idiart
Personal Injury Attorney
As a personal injury lawyer, I have seen far too many instances of individuals who did not have the appropriate car insurance to protect themselves in case of an accident. And what has always amazed me is that for the vast majority of these clients they thought that they either had good insurance or “full coverage” or their insurance agent never told them to do anything different. Not having the proper insurance can leave you in a situation where in the case of a car accident you will not get the full compensation you might expect.
These instances leave me with the unfortunate situation of telling them that there is not enough insurance to cover their losses. Or that spending just $5 more per month they could have doubled or tripled their coverage. Inevitably, even though the discussion is difficult to have, the client leaves that meeting determined to change their insurance levels to what I recommended and to what they now believed would protect them and their loved ones. It doesn’t change what coverage they had for their past accident, but it will help in the future. Don’t wait for an unfortunate and tragic auto accident to evaluate your car insurance coverage.
1. The highest liability limits that you can afford.
Liability insurance protects you when you are at fault in a accident.This insurance covers the cost of the damage that you do. Getting the max plan is especially true if you have equity in your home, if you make a decent wage, if you have some savings, or if you are at the point in life where bankruptcy is not really an option for you. Liability coverage protects you from accidents that you cause. When you look at your liability limits they usually look something like this, “$15,000/$30,000 or $25,000/$50,000 or $100,000/$300,000”. You want to avoid your state minimum insurance in every instance.
2. The highest UM/UIM limits that you can afford.
These acronyms stand for uninsured motorist and underinsured motorist. Uninsured motorist coverage applies to situations where you are hit by someone who does not have current liability coverage on their car. And believe me when I say that you will be surprised by how many people are driving without insurance. Underinsured motorist coverage applies when the person that hit you does not have adequate insurance to pay for all of the damages that you received in the accident. And with state minimum coverages being so low, coupled with medical expenses being so high, this is a scenario that we see every day. You can’t choose who will hit you in an accident where you have no fault at all, but you can protect yourself when this happens by making sure that your UM/UIM coverage is appropriate. Never waive this coverage if that is even a possibility for you. You can often times stack your UM/UIM coverage on top of the liability coverage of the person that hit you so these benefits are essential.
3. One of the higher end options for Medpay or Personal Injury Protection (PIP)
For many these two terms are completely foreign. The best way to describe them are health insurance polices specific to your accident. Instead of using your health insurance to pay for your medical bills after a car accident, you can use your own car insurance to pay for your medical bills depending on what levels of Medpay or PIP benefits your purchased. Medpay is an optional add-on benefit in most instances and can be waived pretty routinely when you purchase insurance, so make sure to discuss what levels of coverage are available to you and always ask how much it will cost to bump up to the next available level. PIP is mandatory coverage if you live in a state where it is offered. Don’t settle for the minimum PIP coverage. Always step it up at least one level if you can possibly afford it. A nice added benefit about PIP is that it doesn’t just cover your medical expenses but it acts as a short term disability policy replacing the majority of your lost wages. This is a very helpful benefit to have when you need it most.
4. Property Damage to cover the value of your vehicle
Property Damage “PD” (both liability and UM/UIM) coverage that is appropriate for the value of your vehicle. With how expensive cars are these days you want to make sure that you get enough to properly repair your vehicle.
5. Consider Comprehensive/Collision Coverage
Comprehensive/Collision coverage, aka “full coverage”, allows you to get your car fixed when you are the cause of an accident. If you have a car loan then your bank/credit union will assuredly require you to have comp/collision coverage.
6. Consider the need for Rental Car Coverage
This is likely included in your policy but it is good to ask your agent about. It is important to consider this if your were to lose your car in an accident or theft would you day to day life stop without it or would you have other options while your car was repaired or you shopped for a new one.
7. Ask about Gap Insurance
This is not something that would be included in your regular insurance policy. It is actually a separate insurance policy. You need Gap insurance when you owe money on your vehicle and it is likely that the amount you owe is more (or very close to) than the vehicle is worth. We have all heard how cars instantly depreciate the second you drive them off of the lot. Well this is actually true. I have seen so many clients who are nailed in their car, the damages result in a total loss of the vehicle, and the amount that is offered to them by the insurance company is not enough to pay off the car loan. Many times I can’t do anything for this client unless they purchased Gap insurance prior to the accident. You still won’t have enough money to buy a replacement vehicle, but at least the Gap insurance will pay off your old loan. I see this to be an especially important form of protection now that so many consumers are in the habit of rolling over the unpaid portion of a prior car loan into a newly package loan with their new car loan.
I hope that this short primer on what to look for when purchasing car insurance has been helpful. I would recommend that you immediately reach out to your insurance agent and talk to them about your current coverages and get a quote for what it would cost to increase your coverages to the next available limit. And if the costs are prohibitive shop around because the difference in prices between insurance differ widely.
If you wait to deal with this after your accident it will be too late. And of course, if you need any recommendations regarding any of this, please feel to reach out to anyone at Idiart Law Group and we will do everything we can to assist you.
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