Everyone should have insurance on his or her motor vehicle. If you purchase car insurance, you will purchase or be given the option of purchasing the following insurance coverages:
- Med Pay
- Uninsured Motorist
- Underinsured Motorist
All of these car insurance coverages are important. The only exception to purchasing them all is collision coverage may not make sense if the vehicle you are insuring is of little value. Unfortunately, too many people think that if they have purchased collision coverage, they have “full coverage.” Such is clearly not the case.
Car insurance collision coverage protects you against the cost of repairing your own car. You would need this in the situation where the accident is to some degree your own fault or the other party in the accident did not have car insurance. Collision car insurance coverage may in fact be the least important coverage you can get. Unfortunately, it is the only coverage that most people pay any attention to.
Comprehensive car insurance coverage protects the insured against damage or loss of your car from something that might happen which is not related to the vehicle being driven. Examples are theft, fire, wind and hail. Hitting a deer is also covered under this comprehensive coverage as such accident is not the result of any negligence in the way in which the car was operated.
Med Pay Coverage
Medical Pay car insurance coverage provides payment for medical bills resulting from a motor vehicle accident.
Our recommendation is to purchase a minimum of $5,000 of med pay coverage if you have medical insurance, otherwise get as much as you can afford.
This coverage is purchased to protect you if you get sued because of a car wreck that you caused. This is the most important car insurance you will acquire, not only because it will prevent you from being unable to pay if you get sued, but also because it is part of your responsibility as a driver of a what can be an instrument of destruction, your car. How much liability coverage is enough? The more the better, but get your car insurance agent to quote you the difference to buy higher policies.
The amount of liability insurance you purchase is doubly important because it dictates the maximum amount of uninsured and underinsured coverage you can buy.
$100/300,000 policies are not enough and policies which provides a split coverage, provide an illusion of more coverage than if really relevant.
A $100/300,000 policy only provides $100,000 available to settle any one person injured. $100,000 is about what the medical bills would be for one weeks hospitalization in a serious wreck. Even accidents where people walk away often have values above $100,000. If a younger person suffers a neck or back injury which prevents them from returning to employment, the size of the claim will almost always exceed $100,000. If a 20 year old person’s income is reduced even a few dollars an hour as a result of injury, the loss of earning capacity over a lifetime cost exceeed $100,000. Damages in motor vehicle wreck also include pain and suffering, loss of enjoyment of life and medical bills. For info on damages in personal injury actions, click here.
Our recommendation is to purchase a single limit $500,000 liability coverage and to also explore getting a $1 Million umbrella policy.
Uninsured Motorist Coverage
Uninsured Motorist Coverage is extremely important because it protects the insured against being loss by what are often the worst drivers on the road, such as the type of drivers who don’t have insurance because their driving licenses have been revoked or suspended.
Underinsured Motorist Coverage
Even more important than “uninsured motorist coverage” is underinsured motorist insurace. Where uninsured coverage protects the insured from the driver who doesn’t have insurance, underinsured protects the insured from someone who doesn’t have enough insurance. There are far more drivers who don’t have enough insurance than drivers who have no insurance. Thus, it is imperative that you buy as much of this coverage as you can avoid. Drivers with DUI convictions and financial responsibility violations, only have to prove they have $25,000 of insurance.
Our recommendation is to purchase a single limit $500,000 of both uninsured and underinsured coverage and to also explore getting a $1 Million of both on an umbrella policy.