Uninsured Motorists: Are You Taking a Major Gamble on Your Auto Insurance Policy?
We regularly represent people who are involved in car wrecks. Recently, we have noticed a disturbing trend that has created major coverage issues for people. That is with our clients waiving the “uninsured” coverage on their auto policies. Basically, waiving this coverage means if you are hit by someone who has no automobile insurance on the way home today, there will be no coverage for your loss. None! It is shocking to see a policy where our client has waived this type of coverage and is then placed in a precarious financial situation because of it.
Many insurance companies actually require insureds to check off/initial/or sign that they are declining uninsured coverage. This waived coverage is particularly troubling when someone – maybe you or a family member — is left with serious injuries after a collision which then cause them to miss work and incur high medical bills. Our clients are typically appalled to learn that the driver who hit them didn’t have any insurance, but insult is added to injury when they learn that they either intentionally or unintentionally waived the coverage that would have helped them in this situation.
So, why would anyone ever waive this type of coverage? The short answer is, to save a little money each month on their auto insurance. But, in reality, that “little money” may only be around $6-$10 a month. And that “little savings” can actually result in a future loss wracking into the thousands of dollars, or—as we have seen recently—even $100,000 or more. Yes, a $100,000 loss in order for them to “save” $6-$10 a month. The entire point of purchasing insurance of any type is to hedge against any future losses, so why would someone waive coverage in the exact area they need it most? While it makes no sense logically when all of the facts are out on the table, like they are in this post, people are usually eager to save that $6-$10 a month (or whatever nominal amount it is) because they don’t realize the truly scary position in which they could be placed in the future. The potential future loss far outweighs the minimal monthly savings.
To ensure that you and your loved ones are protected, pull out the “Declarations Page” of your auto policy and check on these key provisions below to see if you have coverage.
Underinsured Motorist – provides you coverage in the event you are ever hit by a driver who has insurance at some level, but is “underinsured” – meaning without sufficient insurance to cover your full damages
Uninsured Motorist– provides you coverage if you are hit by a driver with no insurance.
Medical Payments – also known as “Medpay” – provides coverage from your own policy that pays the medical bills for you AND your passengers if any of you are ever injured in a collision. This coverage applies regardless of fault AND is paid up front as bills are incurred rather than months or years later when a claim is settled. You will typically have to pay back a portion of the Medpay advanced to you if you receive a personal injury settlement. However, if you hire a lawyer, you typically pay back only a reduced amount of what is paid out on your medical bills. For ERISA (government funded) health insurance plans, you may have to pay back the entire amount dollar for dollar once a settlement is reached. But either way, this Medpay coverage will keep your doctors and other medical care providers timely paid and prevent you from being placed into collections. This part of your auto policy basically functions like a loan to yourself at a time when you need it most, then if you receive a personal injury settlement, you pay that loan back (in part or in full, depending on the type of health insurance you have and the aggressive advocacy of your attorney). It is an essential benefit and one you want to have available to you. Most importantly, if you do not receive a personal injury settlement, you do not pay it back. We recommend minimum coverage of $10,000 for Medpay, but is usually available up to $100,000 for a very low premium.
Other Important Misconceptions
People often have misconceptions about the amount of coverage they have—which is typically referred to as the “policy limits.” Most people believe that the coverage they have sounds like a lot more than what it actually is in light of the skyrocketing cost of medical care.
We recommend carrying no less than a $100,000/$300,000 policy and making sure that you have both underinsured and uninsured motorist coverage on your policy. If you can afford a $250/500k auto insurance policy, you should do it. To add a bit of perspective on the cost of upgrading an auto policy, one of our Firm’s employees upgraded her auto policy from a $100/300k policy up to a Million Dollar policy for about $65.00 per year. In other words, for the price of one dinner out, she has secured her and her family’s financial future in the event of a major car crash resulting in injuries to her or a loved one riding in her vehicle. The worst time to have insufficient coverage is when you need it! Don’t allow yourself to end up in that situation.
Check your auto policy!
Make sure that you and your family are covered and protected the way you think you are. Have a discussion with your insurance agent regarding the key portions of your auto policy outlined above. Know and understand what your policy provides and what your limits are. It is important to understand what you are paying for. And if you should ever be involved in an automobile collision that injures you or a loved one, call us to speak with one of our experienced personal injury lawyers free-of-charge before you speak with the insurance company. We will do everything we can to make sure your interests are protected and that you get what you deserve.
Contact us today!
