By Suzanne Leslie Esq.
Most people are not familiar with their auto insurance coverage. I frequently hear “I have full coverage” when in actuality they have very little coverage and may be exposing themselves to personal liability. Here are some basics.
Liability coverage will pay for any injuries or property damage that you may cause to another party should you be at fault for an accident. The amount of coverage you should carry under your policy depends on your assets. If you own a home or have other assets, you should carry a higher liability limit. If you do not have enough liability coverage and you cause a substantial amount of damage to another, you may be personally liable for any amount over and above your liability insurance. You might also consider carrying an umbrella policy if you have several assets or a large amount of equity in your home. This coverage would come into effect if the damage sustained by another person exceeds your liability policy limit.
Uninsured/Underinsured Motorist Coverage: There are many people who drive without insurance. If you are involved in an accident with an uninsured driver, and you sustain an injury, you have a right to make a claim under your uninsured motorist coverage. Your claim would cover your medical expenses, loss of earnings, future medical expenses and pain and suffering damages. In the case where the party who hits you has auto insurance, but their liability limit is insufficient to cover your damages, then you may have a right to collect under the underinsured motorist portion of your policy to make up the difference the other party could not pay. It is a good idea to carry just as much uninsured/underinsured motorist coverage as your liability limit.
Medical Payment Coverage: This coverage will allow for payment of any medical expenses you or anyone in your vehicle may incur, irregardless of who is at fault for an accident. It is important coverage to carry even if you have medical insurance because it can pay for any deductible or co-payments, which you may be personally responsible for. Also should you wish to seek medical attention with an out of network physician, medical payment coverage can pay for that medical care.
Comprehension/Collision Coverage: This coverage provides for payment of any damages, which your vehicle may sustain, whether or not an accident is your fault. If the case where your vehicle is stolen, it would be replaced. This coverage will have a deductible, which applies, so try to carry a deductible, which you feel you would be able to afford should you have an accident.
Rental Car Coverage: Rental coverage is important to carry and does not cost much. If you vehicle is involved in an accident, rental coverage will help pay for a replacement vehicle while yours is undergoing repairs. If an accident is not your fault, many insurance companies will not provide a rental vehicle directly and they will require that you pay for the rental out-of-pocket and later be reimbursed. Sometimes you must wait several months for reimbursement and a rental vehicle might be financially draining.
Suzanne Leslie is a partner at Allen, Flatt, Ballidis & Leslie and is an expert in insurance and auto accident cases.