The Most Important Car Insurance Coverage

The Car Insurance Coverage You Shouldn't Drive Without.

By Mark T. Freeley, Esq. (Open Post)June 9, 2011 at 1:38pm

With our ongoing not-so-positive economic situation, many drivers have opted to reduce the amount of their car insurance in an effort to save money on their premiums. Some drivers have even chosen to risk driving with no insurance as they simply can't afford to pay for it.

Moreover, the typical driver with a bad record is usually in an Assigned Risk pool that each Insurer has to accept a certain percentage of drivers from, and these drivers almost always have the required minimum amount of liability insurance. Unfortunately, the odds of one of these drivers causing an accident is quite high, and now there are increased odds that whoever hits you will have a small liability policy.

This can have a dramatic effect upon you or your family if you become seriously injured by one of these drivers, because there simply won't be a sufficient amount of insurance to reasonably compensate you for your pain, suffering, loss of enjoyment and quality of life, loss of wages and medical bills. This is because New York State only requires a vehicle to be insured for $25,000 to operate it on our roads. So, regardless of how serious your injuries are, how much income you lose or how high your medical bills are, you are likely to only end up with a whopping $25,000 in compensation.

This is where the most important car insurance coverage comes into play. This coverage is called Uninsured Motorist coverage and Underinsured Motorist coverage, also known as Supplementary Uninsured Motorist coverage. This is the part of your car insurance policy that you will have to rely upon for adequate compensation if you become injured by one of these drivers with little or no liability insurance.

Do you have this coverage? Do you know how much of this coverage you have, or how much you really should have? Don't rely on a general statement from your insurance agent or broker that you are" fully covered," because that doesn't really mean much. They may be referring to the fact that you have a lot of liability coverage, that will provide protection if you cause an accident and someone makes a claim against you. Liability coverage will not afford you coverage for your injuries.

If the at fault car that injures you has an expired or lapsed insurance policy, you will need to rely upon your Uninsured Motorist coverage, as this will be your only source of compensation for your injuries. This is the coverage that would also protect you if you were involved in a hit and run or if you were struck by a stolen vehicle.

If the at-fault car was insured but with the minimal limits of $25,000, you would need to rely upon your Underinsured Motorist benefits to compensate you for your injuries/damages valued in excess of $25,000. In order to qualify for these benefits, your liability limits must be greater than the at fault car's limits and your Underinsured Motorist coverage must be greater than $25,000.

For example, if your liability limits were $100,000 and your Underinsured Motorist limits were also $100,000 ( they should always be the same), then depending upon your injuries/damages, you could recover the $25,000 from the at-fault driver and then recover another $75,000 from your Underinsured Motorist coverage for a total of $100,000. If you had $250,000 in this coverage, you could recover up to an additional $225,000.

This is the minimum amount of Un/Underinsured Motorist coverage that I would recommend; some insurance companies allow you to obtain even higher amounts. Since this coverage is likely to be your only source of compensation regardless of how seriously you are injured, you should obtain the most coverage that your budget permits.

This coverage provides you a layer of protection wherever you become injured - in your car, a friend's car, while walking, riding a bicycle, etc. - and provides the same protection for all residents of your home. It is simply the most important coverage to have in order to properly protect you and your family. Having a sufficient amount of this very affordable coverage can make all the difference if you are injured by a car with little or no insurance.

Take the time to review your car insurance policy and speak to your insurance agent/broker to ensure you have this crucial car insurance coverage before you need to rely on it. You will be happy you did.

Keep it safe out there.

Mark T. Freeley,