The Importance of Carrying the Right Amount of Car Insurance. It could change everything...
We believe that there are 3 types of auto insurance every person MUST have.
- Uninsured & Underinsured Motorist Coverage
- Liability Coverage
- Medical Payments Coverage
By carrying the proper insurance you could save your family from financial ruin after an accident.
1. Uninsured & Underinsured Motorist Coverage1. Uninsured & Underinsured Motorist Coverage
These are parts of the typical car insurance policy that are least understood by consumers and insurance company sales representatives, and yet they may be the most important coverage you can get for your family. This insurance covers you if you are in an accident and the person who hit you has either no insurance or has less insurance than you do. The minimum coverage required in California is as follows:
* $15,000 for injury/death to one person.
* $30,000 for injury/death to more than one person.
* $5,000 for damage to property.
If you are seriously injured by another driver and they only care $15,000.00 of coverage how can you protect your finances? (Note: It is illegal to drive in California without insurance. However, people do.) Many people who do carry insurance, carry the minimum policy. This will not cover your damages if they injure you. Often, people let their policies lapse. You can protect yourself through your own policy that provides underinsured or uninsured motorist coverage. It will step in and act as the insurance company for the person who has minimum coverage or no insurance at all. If you have 500 thousand in uninsured motorist coverage it will protect you up to that amount. When this insurance is "accessed", it does not increase your rates if you were not at fault in the accident. Underinsured motorist coverage will be used if the other driver has a smaller policy than yours. For example, you carry 500k in underinsured, and they have a policy of only 100k. The defendant's insurance company would step in for the first 100k. Your insurance would step in and pay 400k. This coverage, when you increase it, is amazingly affordable. You may have to increase your liability coverage in order to increase your underinsured motorist coverage. This is a great thing to do.
At Case Barnett Law, when we file a lawsuit or send a policy limit demand letter, the insurance company has 2 options. Settle the case for the policy limits or reject the claim. If they settle the case for the policy limits, we are done. Our client will only receive what the other driver's policy covers (unless our client has an uninsured/underinsured policy). If the insurance company rejects the claim then the policy is "open". This means that the negligent driver's policy limits no longer matter. We can now go after the appropriate amount of money to cover our client's damages. If the insurance company sees a serious accident with damages in the hundreds of thousands of dollars, you better believe that they will settle quickly for whatever their insured's policy limits are. For example, we had a very serious wrongful death case in which our client's husband was killed by another driver. The insurance company for the negligent driver settled quickly after we filed the case. They knew that paying out the 75k policy limit was much less than what we would've recovered for our client if we were able to litigate the case. We recommend getting the maximum amount of uninsured/underinsured motorist coverage that you can afford.
2. Liability CoverageThis type of coverage protects you and your family if you hurt someone through your own carelessness. You will have a claim and possibly a lawsuit made against you. This portion of the policy will pay the claim and it will pay for your insurance defense attorney. How much will they pay? Typically, you see the liability protection phrased like this: 25/50 or 50/100 or 100/300. What does this mean? These numbers are the maximum amount your insurance company will pay each person in an accident and the maximum amount your insurance company will pay total for the people injured in an accident. Example: 100/300. This means that if you cause an accident, your policy will pay up to 100 thousand per person injured with a maximum claim limit of 300 thousand per accident. Is that enough coverage? This is a personal decision but our advice to you is to buy as much coverage as you can afford. You would be amazed at how expensive even a few nights in the hospital can be.
3. Medical Payments CoverageMedical Payments, commonly referred to as "Medpay" is extremely valuable to have. It is essentially a small health insurance policy that will promptly pay some of your medical bills, including co-pays and deductible if you have been in an accident. Remember, the person who caused your accident will ultimately be responsible for paying your medical bills but that could take years. Having Medpay, even if you have a health insurance policy, is generally worthwhile.
You should definitely have Medpay if:
1. You have no health insurance (Medpay can prevent medical bills from going to collections)
2. You have high deductibles or co-pays (In a serious accident these could go into the tens of thousands of dollars)
3. Even if you have your own health insurance policy 90% of those policies require subrogation (reimbursement).
Subrogation means that if you are injured in an accident and you incur medical bills your own health insurance company pays the bills. They are going to want to be reimbursed out of the proceeds of your auto accident claim. They will be first in line when you get a recovery from the third party. If the settlement is small this may mean you receive nothing. Medpay can be used to fund the subrogation aspect of the claim. Medpay can also help doctors get paid promptly to preserve your credit and keep bills from going to collections. If you have this coverage you will want to submit all your medical bills directly to your own insurance company until they have paid up to the limits of their coverage. If you do not have this type of coverage, you should strongly consider purchasing it. Remember, your own health insurance company may be no more than a glorified loan that needs to be repaid at the end of the case. Medpay is typically purchased in increments of one thousand, five thousand and 10 thousand dollars, and it is fairly inexpensive. You should look at the "declarations page" of your car insurance policy or call your agent to see if you have purchased medical payments coverage.