Car insurance. We all have it, don’t we? The State requires that we do. But do you really know what you’ve purchased from your local, or on- line, broker? The right time to learn about your insurance is now and not, after you’ve been in a car accident; when you really need it.
Boiled down to its most basic elements, every auto insurance policy has two fundamental parts: liability and collision/comprehensive coverage, and uninsured/underinsured motorist coverage. As its name implies, liability coverage applies if you are involved in an injury producing accident, and it’s claimed to be your fault. If you look closely at your insurance policy you will see that it identifies your coverage limits, usually using two numbers, for example “15,000/30,000; or 100,000/300,000”. Depending on what limits you purchased, what those numbers mean is that your insurance company has agreed to pay a maximum of $15,000 or $100,000 to any one person injured in such an accident, and up to $30,000, or $300,000 in total, no matter how many people are injured or killed in the wreck. Speaking from experience- the minimum limits of coverage required by the State, $15,000/$30,000 is woefully inadequate. You should buy as much liability insurance as you can reasonably afford, and $100,000/$300,000 should be the minimum. Remember, your liability coverage is there to protect your personal assets from exposure to the claim.
[Collision/comprehensive coverage deals with recovery of the cost for damage to your car and is not the focus of this article].
Uninsured/Underinsured motorist coverages are the second major component of virtually all auto insurance policies. This coverage is designed to protect you and your passengers, if you are involved in a crash caused by someone else, and that other driver either has no insurance –an “uninsured motorist”; or has less liability coverage on his or her car than you maintain in underinsured motorist coverage on your car –an “underinsured motorist”. In that circumstance, your own insurer steps in to cover your claims for injury and those of your passengers, as well. These coverages are usually designated “UM/UIM” coverages, and normally will have the same value designations for the coverage limits they afford, as for your liability coverages (eg, 15/30 or 100/300). Since we all know that many folks are on the roads driving without any insurance, UM/UIM is an important element of your auto insurance; and perhaps the most important if you, yourself, are a good driver.
Beyond basic auto insurance coverage, many people carry an umbrella, or excess, policy that will apply if the value of the claim against you, or the value of your own claim, exceeds your basic policy limits. Such policies are often quite inexpensive, can provide coverage limits up to several million dollars. This type of additional coverage is a good investment in your own financial security.
In short, the more coverage you have the better. Talk to your auto insurance broker today. Discuss the meaning and amounts of your coverages, and if at all possible raise them!
James E. Simon is a partner at Porter Simon and is a member of the firm’s Trial Practice Group where he focuses on all aspects of civil litigation with an emphasis on business matters, personal injury and wrongful death claims.
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The content contained and opinions expressed in this blog are solely those of the author. This blog contains content and opinions concerning the law generally, and is not intended to constitute legal advice or to create any attorney‑client relationship with the reader. The reader should consult with an attorney about any specific legal issues prior to embarking on any course of action or inaction involving legal matters. The author makes no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of this blog and expressly disclaims liability for any errors and omissions.