Turning on the television for more than ten minutes will result in seeing at least one auto insurance commercial. Insurance companies spend millions every year trying to get you to buy auto insurance, but do they ever really offer you any details? Of course not—it’s all about price—and it’s “all the same,” anyway, right?
Well, as one of the one of the commercials reminds us: You can really get burned if you don’t have the right coverage.
Auto insurance can get very expensive, especially if you have multiple vehicles or young drivers. But not having the proper auto coverage can result in financial disaster for you or your family. Many feel that insurance is just another bill to pay—a necessary evil. They purchase “just enough” coverage and may not even talk to an agent. We have handled way too many cases where families purchase cut rate coverage to save short-term costs. Remember, purchasing proper auto insurance not only protects you if you cause an accident, it also protects you if somebody else causes it.
When purchasing coverage, consider the following to protect you and your family:
“PIP” or personal injury protection – This coverage is designed to pay your medical bills or wage loss if you are injured, whether the accident is your fault or somebody else’s. Many people do not have disability coverage and, without wage loss coverage, your income may stop if you can’t work as a result of your injuries. Most companies also offer bundled work and wage loss coverage, at a very reasonable price, which can provide protection up to a combined one million dollars.
UIM (underinsured) and UM (uninsured) motorist – This coverage is critical. Do not waive this coverage or purchase this coverage with lower limits than your liability coverage. It is designed to protect you. For example, if you are involved in an accident with a negligent driver, and that driver has the minimum liability coverage of $15,000, your recovery may be limited to that amount. Most times, drivers with this low coverage have no assets and there is no other source of recovery. If you have UIM (underinsured) coverage, after recovery of the $15,000, you can proceed under your own policy, up to your UIM (underinsured) policy limits. UM (uninsured) offers additional protection if you are injured by a negligent driver with no insurance or you are involved in a “hit & run” and the negligent driver is never identified.
Full Tort – Always select this option. “Limited Tort” cases can be very difficult and may result in lower recovery or none, at all. With limited tort, unless your injury is a permanent impairment of a bodily function, you may be precluded from any recovery for your pain and suffering. Full Tort is really not that much more expensive and well worth the extra cost for the protection.
Stacking – This option will allow you to “stack” the UIM or UM coverages on your policy according to the number of vehicles. For example, if you purchased $100,000 of UIM coverage and have two vehicles in your household, stacked coverage will allow you to recover $200,000 (2 x $100,000). Non-stacked coverage will limit recovery to one vehicle or $100,000.
Liability limits – Purchase the highest liability limits you can afford and make sure your UIM and UM limits are equal to the liability coverage. Many times, the cost difference between $100,000 and $300,000 is fairly minimal. Most of the expense of your policy is based on the protection of your vehicle and not you. That is why different vehicles cost more than others. The declarations page that arrives with your policy will contain a breakdown of your coverages. If you are a high-earner, consider the purchase of an umbrella policy. These policies are usually fairly inexpensive and provide you with an additional layer of protection.
Single policy – Consider insuring you and your family members on one policy rather than separate policies. If you must have separate policies, try and keep them with the same company. This may serve to offer you better protection in the event of a UIM or UM claim.
Review your coverage – Review your coverages on a yearly basis. If you need to make changes, make sure you receive verification. Keep all your forms in a safe place. We will need to review them in the event you have a loss. If you are involved in an accident, report the loss to your agent or carrier as soon as possible.
Accidents, no matter how small, can be a traumatic experience. Download our car accident checklist so you will know what to do if an accident happens.