Protect yourself and your family as much as you protect others!

When I am consulting with a potential new client regarding an auto incident, one of the standard questions is what are your insurance policy limits? Most people say I have full coverage. Well you can comply with California’s mandated limits of $30,000 per person and $60,000 per incident liability coverage and $15,000 property damage, but you are not “fully covered.” If you, your spouse, your child or a person that ask to use your car to do an errand causes and injury incident the amount of money that you may be responsible for may very well exceed those California mandated minimum limits. An injury collision can result in long-term sprain and strain injuries, shoulders injuries and knee injuries, which may require injections or surgery. There can be more serious incidents that can cause someone long-term disability, such as head trauma and chronic pain conditions, and there can be incidents that cause scarring, dismemberment of even death. Not wanting to sound too gruesome, but the most dangerous thing that you probably do on a daily basis is drive your car. So while you can take every precaution on the way that you operate your car, I suggest that you also make sure that your insurance liability is adequate to protect you for any economic damage that may result from driving your car.

Your liability limits are something with which most of us are familiar. In addition to the California minimum limits, you can purchase liability coverage of $50,000/$100,000, $100,000/$300,000, $250,000/$500,000 or other limits. The reason to purchase more insurance than the minimum required is to protect you financially. If you or someone driving your car causes injuries to other, then you don’t want to be in a position that your liability coverage is not enough to pay for all the damage that the injured parties have sustained. If you have minimum limits and the other party requires a $50,000 surgery on their shoulder, then you may be facing a shortfall in insurance coverage, which you may have to come out-of-pocket, especially if there is a jury verdict against you! So, make sure that you have adequate liability coverage, to protect you, your assets, such as your home and your family’s economic well-being. But isn’t that enough?

Now that you have made sure that are protecting others by having adequate liability coverage on your automobile policy, you need to make sure that you are protecting yourself and your family from other people’s negligence while driving. What if someone crashes into your car and causes injuries to you that require surgery or long-term care. You may say, “I have health insurance, I don’t need other coverage.” Will your health insurance pay for your lost wages, pain and suffering, medical co-pays or medical procedures that your health coverage won’t approve? You need to know what your uninsured motorist coverage limits are on your automobile insurance policy. Some people don’t even have it, as you can decline this type of coverage. But the biggest problem is that many people do not have enough uninsured motorist coverage. How much do you need?

Well, let’s assume you are in an accident and sustain a shoulder injury. You are out of work for six weeks. You end up having a shoulder surgery. Your then have 6-8 weeks of physical therapy rehabilitation. How much is such an injury worth? Well there are many variables that make up the answer, but let’s assume that your medical bills are $50,000, you lost $6,000 in earnings and you dealt with 4-6 months of acute pain and suffering. Those types of injuries could have a value of $125,000 to $185,000 depending on whether you get back to where you were physically prior to the incident. But the person that crashed into you has a $30,000 per person limit on his auto policy. Approximately a third of all drivers have the minimum limits. So how can uninsured motorist coverage protect you?

Well let’s say that you have $100,000/$300,000 uninsured motorist limits (your uninsured motorist limits can never exceed your liability limits). So the other insurance company offers you its $30,000 insurance policy. You then can make an underinsured motorist claim against your own policy. Your attorney will demand that your own insurance company pay you your $100,000 limits, less the $30,000 that you received from the other insurance company. But hey, you said the damages could be worth as much as $185,000? Well if they are, then you need more coverage.

We all have to make economic decisions in life, including how much insurance to buy. My advice is to always make sure that you have enough liability coverage to protect you from any claims from other people due to an accident that you or your family members cause. But always make sure that you are also protecting you and your family up to those limits with your own uninsured motorist coverage. Insurance is something that is worth it, especially if you never have to use it. But if you do have an incident where you are injured and there is inadequate coverage to compensate you or your family members for their injuries and damages, then let your adequate uninsured motorist coverage make up the difference and get your just compensation. Now check that auto policy!