Suppose you were walking on the sidewalk, minding your own business, and an out-of-control car came up onto the sidewalk and knocked you over, causing very serious injuries. You might never be able to work again, and are expecting a large amount of compensation. You’d be very disappointed to find out that the car that hit you only carried the minimum amount of insurance.
Someone with a minimum policy in New York would have the following policy limits:
Bodily Injury liability coverage: $25,000 per person and $50,000 per accident
Property Damage liability coverage: $10,000 per accident
Uninsured Bodily Injury coverage: $25,000 per person and $50,000 per accident
Personal Injury Protection: $50,000
If you were to get struck by a vehicle, the most money you can obtain for your injuries as per the minimum bodily injury liability coverage limits would be $25,000 (and that’s before attorney fees).
Accidents occur when we least expect them. Being adequately insured and prepared in the event of an accident helps ensure a smoother and stress free process after the fact.
WHAT CAN YOU DO ABOUT THIS? PROTECT YOURSELF WITH UNDER INSURED MOTORIST COVERAGE
You can add underinsurance motorist coverage to your own policy to protect yourself if you’re struck by someone with limited coverage. Underinsured motorist coverage allows you to receive compensation from your own insurance company after the at-fault driver’s policy has been ‘tendered’ (the insurance company offered you the maximum value of the policy). Underinsurance is especially important when dealing with catastrophic injuries.
If you purchase underinsured motorist coverage allowing for 100/300 additional coverage, you would now be able to receive up to $75,000 additional compensation from your insurance company. If you purchased an umbrella policy, it could cover up to a million dollars. This coverage is much less expensive than people think.
Underinsured motorist coverage is also beneficial if you are struck by an out-of-state vehicle. The minimum bodily injury limits for Pennsylvania is $15,000!
WHAT IF THE CAR FLED THE SCENE? UNINSURED COVERAGE AT A HIGHER RATE
As depicted above, New York State minimum liability requires an uninsured motorist provision for at least 25/50. Different from underinsured coverage, this comes into effect if you are a victim of a hit-and-run accident, or if the operator of the adverse vehicle has no insurance. Your insurance company would pay not only for your medical bills but also your bodily injury claims. But let’s say you’re struck by a vehicle that flees the scene, and you’re operating a vehicle with three passengers. With the minimum 25/50 provision, all four people (including yourself) could only be compensated for a combined total of $50,000 regardless of the severity of the injuries! Without 100/300 and an umbrella policy, everybody could be fully compensated.
CAN YOU AFFORD TO REPLACE YOUR CAR?
When you’re financing a car, full coverage insurance is usually required as per the terms of agreement. Besides that, it is typically not required. Due to this, some people choose to maintain the liability insurance, but drop their full coverage after they’ve finished paying off their vehicle, or don’t even bother obtaining full coverage if they paid for the vehicle in cash. This can be a huge mistake! Fixing a vehicle can be expensive, and most people don’t have a couple thousand lying around to go towards fixing a car. Even worse, if you get in an accident and your vehicle is totaled you can get nothing back!
WHO PAYS FOR PROPERTY DAMAGE IN AN ACCIDENT?
Even if an accident is someone else’s fault, the other insurance company can take their sweet time or even refuse to pay for your property damage. With full coverage, your insurance company will pay for your damage quickly, and then work behind the scenes to get their money back from the at-fault vehicle so that you won’t have to deal with it.
Full coverage insurance pays for your car to be repaired after an accident whether or not it’s your fault. If you have comprehensive insurance, it will also pay for other sources of damage outside of a car accident, such as a tree falling on your car.
DOES YOUR LIABILITY POLICY PROTECT YOUR ASSETS?
Aside from insurance for your motor vehicle you may also benefit from obtaining umbrella insurance. Umbrella insurance only pays out after your regular 100/300 is expended, so it is inexpensive, and can protect you from the threat of the loss of your home.
KNOWLEDGE IS POWER
Today, take a moment to look at your insurance policy and know what you’re actually covered for. Know how much your deductible is and what the terms of your insurance policy are so that you can make an INFORMED choice regarding your coverage. Before writing it off as too expensive, take the time to find out how much it would actually cost to increase your coverage- it actually may not be as costly as you think. It might be worth every penny to insure your economic future.