Auto Insurance Coverage from A Personal Injury Lawyer’s Perspective
Published On: September 12, 2009
A friend, Johnny, asked me to evaluate his auto insurance coverage. He lives in Los Angeles and drives an Audi TT, a small sports car. Although my often tongue-in-cheek responses are geared for California auto coverages and, in particular, Los Angeles, this should give you an idea of what to look for in your own venue. Most importantly you must be aware that if you do not have insurance coverage that is sufficient to compensate someone for injuries sustained in an accident that is wholly or partially your fault, you could be on the hook personally for that amount which exceeds your policy limits. And, as we all know, accidents happen in what seems like a millisecond – it’s not something that we anticipate BUT it is something that we can prepare for.
I want to stress that laws and insurance policies and coverages are different in different states so please contact your insurance agent to be sure that you’re complying with local and state laws and are getting the coverage that best suits your own particular needs.
Please also note that I’m being relatively specific in my responses to Johnny. I’m just being illustrative when referring to a crosswalk accident. You can replace “crosswalk” with “running a red light,” “making an unsafe U-turn,” “rear-ending the car in front of you” or 25,000 other possible scenarios!
In response to your questions regarding your current auto insurance coverage:
Your Bodily Injury Coverage is $50,000/100,000. Increase it to at least $100,000/300,000 — right now you have $50/100 which means that if you accidentally whack someone in a crosswalk and break their hip, the most they can recover from you is $50,000. Also, if there are more than two people in that crosswalk, and you hit and injure all of them, then the most that will be paid out is $100,000 somehow divided by those 3 people. You risk them getting an excess judgment against you and garnishing your wages. In general the best coverage, in my opinion, is the maximum coverage your carrier allows. It usually doesn’t cost much more to maximize.
Property Damage: Right now you have $50,000 in coverage which means that the most that your insurance carrier will pay for damage to the other person’s car, his/her rental coverage while his/her car is being repaired or evaluated for a total loss, towing and storage is $50,000. Get the most PD coverage you can — in L.A., the cheapest car is $50,000 so, if you cause an accident and total out a Bentley, they could sue you for the difference between $50,000 and the value of the car. I carry $500,000 Property Damage because I know that with my luck, if I get into an accident it will be with a rock star being driven in a $250,000 tricked out Lincoln Limo.
I cannot stress the importance of Medical Payments Coverage: Get the most that you can get. I don’t remember if you have health insurance or not but, if you get into an accident, regardless of fault, you and each of your passengers will be entitled to have your reasonable medical bills paid up to the limits of your med pay coverage. Most people have $5,000 but, in today’s world, if you can get $25,000 or more that would be great (it depends how much your carrier provides). Also, tell them you do not want excess coverage and you want it to be NON-REIMBURSABLE in a third party claim. This means that if someone rear-ends you and they are obviously at fault, then when you get a settlement from their insurance company you do not need to pay your carrier back for the medical payments that they made on your behalf. This also covers each of your passengers for the same amount. I always worry that if a passenger in one of our cars doesn’t have health insurance and we get into an accident, that they will be unable to pay their medical bills. With this coverage, that isn’t a problem (subject to the policy limits). Your med pay can also kick in if you’re hurt in an accident in someone else’s car, are on your bicycle, in a crosswalk, etc. That’s tricky but I’ve invoked it for many, many clients.My carrier allows for $100,000 Medical Payments Coverage (which I have) but this is rare. Again, check with your own carrier.
As for deductibles, ask how much increase your premium will suffer if you lower your deductibles to $500, $250 or even zero. It may be de minimis and therefore worthwhile to decrease your deductibles. It’s human nature to try to save where we can but I’ve heard many a client scream “What? I have to pay the deductible? It’s $1,000!!!” Maybe they saved a tiny bit on their premium by having a high deductible but, when the unforeseen accident occurred, it bit them in the rear.
Rental Coverage: I don’t like the fact that you have to pay 20% of the rental bill and that you’re capped out at $500. This means, with today’s rental prices, you’ll be covered for a max of approximately 20 days or so. It sometimes takes longer than that just for the insurance carriers to get the preliminaries started! I know you don’t really care what type of car you rent so ask them to give you different options for rental coverage and then ask me and I’ll tell you which is the best.
Uninsured/Underinsured Motorist Coverage
Uninsured / Underinsured Coverage: Just like with Bodily Injury, get the most that you can afford. You’re driving a small car. If someone whacks into the back of your TT, you and your passengers could get seriously injured. Right now you’ve only got $30,000/60,000 coverage which means that if the other party is uninsured or only has a $15,000/30,000 policy, the most that each person in your car is entitled to is $30,000 — up to a maximum of $60,000 for all of the people in your car (again, having to divide the $60,000 between everyone). Not good. What if you need surgery or other extensive short or long-term treatment? Your case could be worth in the six figures yet there’s no coverage for this. You should have as much coverage for yourself and your passengers as you have for the unknown person with whom you might find yourself in a wreck.