Uninsured / Underinsured Motorist Coverage

Uninsured/Underinsured Motorist Coverage

You carry auto insurance to cover your liability when driving an automobile but what happens if you are involved in an accident where the person who hits you doesn’t have the same courtesy or doesn’t carry enough coverage to cover the cost of the accident?

If you have Uninsured Motorist coverage on your policy it covers you, insured members of your household and your passengers in an accident with a motorist who has no insurance or is underinsured. It also provides coverage if you’re hit by a hit-and-run driver and applies to you and the insured members of your household, even as pedestrians.

Uninsured / Underinsured Motorist Coverage includes payment of medical costs, lost wages and pain and suffering. It is required in many states but is not a required coverage in Washington State. This coverage typically covers any difference between what the other at fault driver’s insurance covers and the costs of your bodily injuries, up to the limits of the policy.

 

Bodily Injury & Property Damage Liability

Now this is a fun topic and one that really needs to be discussed in great detail and quite frankly should be discussed by your insurance agent with you on an annual basis!

Bodily Injury and Property Damage Liability is by far the one area that 99% of the people I speak with on a daily basis discussing insurance options is completely under insured with respect to their auto insurance policies!!  Why, you may ask?  Liability is one of those nasty little responsibilities that it really doesn’t matter what you have today when you are liable for damages to somebody else, it matters how much you will have over your lifetime.  For example, you’re in an automobile accident and you cause more injury than you have insurance for; you are liable for everything above and beyond that amount!! Even if you can’t pay it!  Now some usually say you can’t get blood from a turnip but the truth of the matter is when it comes to liability they really can!  Your house, your paycheck for the rest of your working life, the assets in your home, etc.. can all become part of a liability claim.

Now then, since I have your attention lets discuss what this coverage does and how to determine how much you have.  This coverage compensates persons who claim that they were injured or suffered property damage because of the ownership, maintenance, or use of your insured auto(s), up to the limit selected on your policy.  Typically this coverage is written something like 25/50/10 which is the Washington State minimum coverage $25,000 bodily injury / $50,000 per occurrence / $10,000 property damage.

Lets talk about that a little further, the state minimum coverage is entirely too low for virtually everybody on the road and is really only intended to help give a buffer to you should you cause an accident.  Realistically $25k in coverage isn’t near enough for any accident that causes bodily injury especially if there is a loss of life or limb!  The per occurrence portion is how much they will cover in an accident so in the example above that will cover 2 people at the maximum amount of $25k; what if there are 3 people injured in the other car?  Well, then you take the $50k and divide it by 3 and now you have coverage for up to $16,666 per person if you were to spread it evenly (example purposes only).

Now onto the property damage amount of $10k in the example… this is the amount they will pay up to for property damage (building, pole, fence, other car, etc.).  How many cars on the road are worth $10k or less?  I wouldn’t recommend carrying less than $100,000 in property damage and your bodily injury should be more like $250k/$500k.

As you can see bodily injury and property damage liability is one of the most important coverages in your auto policy.  When making a decision regarding how much is right for you it is crucial to discuss your options with your insurance agent including your personal exposures such as being a family chauffeur for other people’s children to the soccer game or discussing your personal assets and how to ensure they are adequately covered should the unexpected happen to you.