How To Buy Auto Insurance

The Legal Minimum (liability and property damage only)

The laws of most states require motorists to carry a minimum amount of insurance. In California, for example, the minimum requirements for insurance are $15,000 of liability coverage to cover possible injury to others, and $5,000 of property damage insurance, to cover possible damage to other people's vehicles. The reality is that this minimum is frequently not enough to cover the losses created by a vehicle accident, whether a car accident, motorcycle accident, or other vehicular accident. In a case where a victim is sent to the hospital by ambulance, has Emergency Room treatments including X-rays, CT scans, and other emergency care by the doctors, and then has continuing medical treatments such as physical therapy or chiropratic care for a year or more, the total medical expenses suffered by that victim could easily total $25,000. If the same victim also was somebody who earned $4,000 a month, and missed 4 months of work due to the injuries, that would be another $16,000 of lost earnings. These financial losses total $41,000. In addition to the economic financial losses, the victim is entitled to compensation for pain and suffering, which in a case such as this example could easily be another $25,000 or more. In other words, the claim could have a value of $66,000. If the liability insurance limit of the driver who caused the accident and the injuries is only $15,000, then that person could be held personally responsible for the difference, which in this example would be over $50,000!

Consider the $5,000 property damage limits. If a major collision occurs and the innocent person's Mercedes or BMW is a total loss, the amount of the property damage could easily exceed $50,000 (some Mercedes Benz vehicles are worth $100,000 or more). This would leave the responsible driver who has only $5,000 in property damage coverage personally responsible for the difference, which could be $50,000 or more easily.

When purchasing a new auto insurance policy, motorcycle insurance policy, or one for another type of vehicle, it is a good idea to consider purchasing the maximum policy limits sold by the insurance company, which usually means $100,000 per person, $300,000 per accident, or higher. Some insurance companies sell policies with liability limits as high as $500,000. Budget is an issue of course, but consider the personal risk to your assets when choosing a liability limit for your policy.

Coverage to Protect Yourself and Your Loved Ones (UM and Med Pay)

Frequently car accidents happen that are the fault of another person, but that person has only a minimum policy (limits $15,000) or no insurance at all. Suppose that the damages suffered by the innocent driver are like those described above, with a probable value of the claim being $66,000. It is rare than an uninsured driver has the ability to pay anything at all to settle a claim such as this. Where would the money come from? The answer is from the Uninsured Motorist portion of the innocent person's car insurance policy. The effect of this coverage is essentially to provide the insurance coverage for the uninsured motorist. The claim would be made against the innocent policyholder's own UM coverage and the insurance company would pay. The insurance company then has the right to go after the wrongdoer to seek reimbursement for the amount they paid.

This UM coverage provides protection not only for the driver, but for all passengers in the car, and for all family members of the household of the auto owner, regardless of the vehicle they are in when injured by an uninsured motorist! It will even provide protection for all family members who live in the household for injuries suffered if an uninsured motorist hits and injures them while a pedestrian! Thus, you can see why this coverage is very important to every family.

Medical Payments Coverage is 100% coverage for reasonable and necessary medical and dental treatment needed because of injuries from a car accident. It does not matter whose fault the accident is. It will pay the cost of care for all persons in the insured vehicle up to the amount of this coverage, no matter how many passengers there are. It is a per person coverage. This is very important because passengers may have no medical or dental insurance. No health care policy will pay for replacing or repairing broken teeth from an accident (reconstructive dental work can cost well over $20,000 if several teeth are broken). The injured parties do not have to wait for a settlement either. The medical payments part of the policy pays for the treatment as it is received. When purchasing auto insurance ask what the maximum amount of medical payment coverage is and consider purchasing it. Like UM coverage, it provides coverage for all family members in the household of the auto policy holder, regardless of how or where they are when they are injured by any vehicle. Yes, even if walking down a street, a family member who is injured by a car, even a hit and run vehicle, is entitled to coverage for medical expenses under the Medical Payments Coverage.

The Most Protection You Can Buy - The Umbrella Policy

In addition to the coverage described above, a person can purchase additional insurace coverage, usually in increments of $1 million, which would apply on top of the underlying auto or motorcycle insurance. These separate policies are called Umbrella Policies. Thus, if an insured driver runs over and kills a 50 year old person who earned $100,000 per year, the lost earnings alone could total $1.5 million, assuming a 15 year work life remaining. Where would all that come from? The underlying policy limits for liability of $500,000 plus the $1 million of additional liability insurance under the umbrella insurance policy.

A trickier problem is where an uninsured motorist causes catastrophic injury to a family member who lives in the household of the auto insurance policyholder. If the UM limits are $100,000 and the wrongdoer has no insurance, where would the additional money come from to pay the claim? Some insurance companies will include UM coverage in the umbrella policy. Be aware, however, you must ask for this coverage to get it, and there may be an additional premium.

Handling Claims - Better Get A Personal Injury Lawyer

Following a serious car accident or motorcycle accident which results in injury to you or a family member, or worse, if somebody gets killed. It is extremely important to hire an experienced personal injury lawyer. The attorneys at Blackman Legal Group are ready to help. Call as soon as possible after an accident for advice and legal representation. The fees are always contingent - no recovery no fee, and no money is needed to hire the law firm. The initial consulation is free and confidential. Call toll-free 1-866-528-8115 24 hours a day. The phones are always answered.