SERIOUS auto accidents happen all the time, both to the reckless and the cautious. Buying car insurance is one way to prepare for the unexpected. However, will your car insurance be enough to protect you regardless of who’s at fault? Below are some of the basic coverage you need to consider when purchasing a car insurance:
1) Liability coverage
Liability coverage will pay for the damage you caused to others during a car accident. It also pays for your legal bills if you cause an accident and the other party sues you. Liability coverage will pay for the following:
a) Bodily injury liability – This pays for damages (such as medical bills and lost wages) that the insured caused to others.
b) Property-damage liability – This pays for the repair or replacement of the property that the insured destroyed during the accident. ‘Property’ may include the other car or someone’s fence. It can also pay for pain and suffering damages.
Liability coverage is written as three numbers, for example 25/50/15. That translates to $25,000 in bodily injury coverage per person, $50,000 in bodily injury coverage per accident and $15,000 in property-damage coverage per accident. These are your liability limits. However, if, for example, you caused $100,000 worth of damage and have an insurance limit of $50,000, you’re responsible for the remaining $50,000 and could be personally liable for it. It is always advisable to carry more than the minimum required coverage.
2) Collision and comprehensive coverage
Collision coverage pays to repair your own vehicle in the event of an accident. If your car is considered “totaled” the insurance company will pay you the actual cash value of your car at that time. Buying collision coverage will raise your premium. To keep it down, you can raise your deductible. But if you do get into an accident, you will have to pay the deductible first before coverage takes effect.
Comprehensive coverage pays for damage to your car that isn’t due to car accidents. This includes theft, fire, vandalism, natural disasters and collisions with animals.
3) Medical payments
Medical payments, also called MedPay coverage, pays for the medical expenses incurred by you and your passengers after an accident. It also pays for medical expenses you incur if you were driving someone else’s car with their permission. Or if you were walking on the street and someone’s car hit you, you may also avail of this coverage. Even though MedPay is paid no matter who caused the accident, if someone else is at fault the insurer may seek reimbursement from the party at fault.
4) Uninsured/underinsured motorist coverage (UM)
In these hard economic times, more and more drivers are driving without insurance. UM coverage pays for damages to you and your family if the other driver responsible for the accident is uninsured. UM coverage will pay not only for medical bills and loss of earnings but also for the damages for pain and suffering that could have been recovered from the errant driver’s insurance. UM coverage also protects you if the other driver does not have adequate insurance. Most drivers only carry the minimum $15,000 coverage. This amount is often not enough if there are serious injuries involved and your bill exceeds $15,000. UM coverage will pay for the remaining amount up to the UM limits. As it protects you and your family, it is advisable to carry higher coverage.
5) Other coverage: Car rental, roadside assistance, gap coverage
Although these items may sound unnecessary, they can save you money if you do get into an accident:
Car rental reimbursement pays for a rental car when your vehicle is damaged or stolen.
Roadside assistance includes towing and labor fees for assistance due to roadside breakdowns.
Gap coverage is usually purchased for a new vehicle. This coverage pays the difference between the actual cash value of the vehicle and the amount left on your car loan if your vehicle is totaled. Just because your car is totaled does not mean you can discontinue your car payments. Unfortunately, property damage liability will only pay for the market value of the car at the time it was totaled. This value may less than the amount left on the car loan. Gap coverage will take care of the difference.
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C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully obtained significant results, including several million dollar recoveries for consumers against insurance companies and big business. He is a member of the Million Dollar-Advocates Forum—a prestigious group of trial lawyers whose membership is limited to those who have demonstrated exceptional skill, experience and excellence in advocacy. He has been featured in the cover of Los Angeles Daily Journal’s Verdicts and Settlements for his professional accomplishments and recipient of numerous awards from community and media organizations. His litigation practice concentrates in the followaing areas: serious personal injuries, wrongful death, insurance claims, unfair business practices, wage and hour (overtime) litigation. You can visit his website at www.joesayas law.com or contact his office by telephone at (818) 291-0088.
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