For this post, I’d like to discuss two coverages that many times may be overlooked. You may even look at them as being unnecessary, however, they protect you, the policyholder or anyone that is a member of your household.
Uninsured Motorist Coverage
The first coverage is uninsured motorist coverage. This coverage protects you are any member of your household if you are in an accident with an uninsured motorist. I’m sure you are thinking, everyone has insurance so why do I need this to protect myself? If you think all drivers on the highway have insurance on their vehicles, you are incorrect. While they may have had insurance at one point they may have not paid their premium and their coverage has lapsed. Virginia does not require you to buy insurance, only that you pay a fee to avoid buying such coverage. I’m sure you have seen the box you need to check on the back of your registration renewal. At Osterbind law, we don’t see it often, however it does come up now and then that a defendant is uninsured.
If you choose uninsured motorists coverage, the limits should be equal to that of your liability coverage. It only protects you and the higher limits are not as expensive as you might expect. I would recommend at least $250,000.00/$500,000.00. Your medical bills could be significant if you are injured in an accident with an uninsured vehicle and require substantial medical treatment. An emergency room bill can easily exceed $10,000.00 if several procedures are performed, not to mention if you are admitted. Follow-up visits and care may be necessary, further increasing your medical expenses.
Minimum limits may not be enough to fully compensate you in an accident. If you believe you can collect personally from the at-fault party for your injuries, you are likely wrong. The chances are very slim that will happen. If the at-fault party doesn’t have the available funds to carry auto insurance, they are likely judgment proof, meaning they have very little if any assets.
Underinsured Motorist Coverage
The second coverage I wanted to bring to your attention is underinsured motorist coverage. Many drivers on the roads today carry only minimum limits on their liability coverage. Those minimum limits of $25,000.00/$50,000.00 are often not enough to fully compensate you for injuries received in an accident. I recommend limits of at least $250,000.00/$500,000.00 and here’s why. In Virginia, your insurance company gets an offset from the liability carrier’s limits from your underinsurance limits.
For instance, if the vehicle that hits you carries a minimum of $25,000.00 in liability coverage and you have a $100,000.00 underinsurance policy, then your insurance company gets the offset of the at-fault carrier limits. This means your insurance company only pays $75,000.00 because of the offset. The maximum you could receive is $100,000.00.
This brings up another point. If the at-fault carrier has $25,000.00 in liability coverage and you have $25,000.00 in underinsurance coverage, the most you can collect is $25,000 because your coverage is not exposed at all. Having the minimum limits of underinsurance coverage can be the coverage you are paying for and you may never use it.
Every State Is Different
All of my coverage recommendations and scenarios are based on your Virginia policy and your being involved in a Virginia accident with another Virginia policyholder. Each state has different laws concerning these coverages. You could be afforded more or less coverage depending upon the laws of other states. Most states require at or below the state minimum here in Virginia. Therefore, higher underinsurance limits could be a huge benefit to you in case of an accident out of state.
I have only touched on injuries resulting from these two coverages. Next, I will discuss the property damage aspect of how these coverages can affect you in an accident, especially if you do not carry collision coverage on your car.
We offer free Policy Limit Check-Ups for anyone who wants recommendations on their insurance policy. Give us a call and we will be glad to go over your policy with you.