For over 15 years, I’ve been helping people who have been injured by someone else’s negligence. In that time, I have never come across someone who had a perfect understanding of their vehicle liability insurance coverages. I cannot believe that people in America are not taught a course on vehicle insurance in high school. Understanding the intricacies of vehicle insurance is crucial to protecting ourselves and our families.
Two common scenarios seem to come up regularly. Individuals either have the legal minimum coverage or more than that – “full” coverage. Either way, you have no idea what that coverage is, what it covers, and what other optional coverages you could get.
I can help.
This is a primer. Reading this post will give you a basic understanding of the industry terms and coverage options.
This insurance does not cover you at all, even if you are hurt. It covers anyone you hurt if a crash is your fault.
Specifically, This is the amount of money that your insurance company will pay (or “indemnify”) on your behalf if you injure someone and the accident is your fault.
Every state has a minimum coverage amount. In Montana this minimum is $25,000. That is not a lot of coverage these days.
Think about this. Say you injure someone else in a vehicle accident and their claim has a value of $25,000 or more. You will be personally liable for every dollar owed to them over $25,000.
We recommend obtaining at least $100,000 in liability coverage. The vast majority of vehicle claims are worth less than $100,000. If you can afford more, purchase a little more, but $100,000 is a decent starting point.
Uninsured/Underinsured Motorist Coverage
This is coverage that you receive if someone else is at fault for a crash and is either:
1) Uninsured (1 in 4 drivers on the road do not have insurance)
2) Has minimal Liability Coverage for your claim that is worth more than their policy limit.
Uninsured/Underinsured Motorist Coverage is great. It protects you from irresponsible people who don’t have enough – or any – insurance to compensate you.
Because of the extreme number of uninsured drivers on the road, I would strongly encourage you to get this kind of coverage. If you are covering yourself and your family, I recommend obtaining at least $250,000 in this coverage. As always, purchase more if you can afford it.
Medical Payment Coverage
This coverage pays for medical bills you incur. You receive this coverage whether a crash is your fault, or someone else’s.
To put it simply, this coverage is health insurance for a vehicle crash.
Why get it if you already have health insurance? Good question. Medical payment coverage offers added benefits that health insurance does not. Because you don’t pay any deductible, you never pay it back. Plus, it is usually paid out with no questions asked.
This is the most misunderstood coverage. Most people should have it, but don’t. It is especially valuable when an accident is someone else’s fault.
Your Med Pay will pay for your bills, and then the responsible driver’s company will also pay for the same bills.
Yes, your bills get paid twice. After the first payment, you keep that money. You could be pocketing this med pay money, at an amount that can be substantial.
This coverage is CHEAP. You should go get it today if you don’t have it. I recommend obtaining at least $50,000 of medical pay. Of course, get more if you can afford it, or if your company will provide it.
Comprehensive & Collision Coverage
This is coverage for your car. This is what most banks will refer to as “full” coverage. It’s full in the sense that the insurance companies take care of your car. You are not covered.
If your car is involved in a crash this coverage will pay for repairs to your vehicle after you pay the deductible. If a crash is someone else’s fault, you can use this coverage to repair your car and have the other party pay your deductible. If a crash is your fault, this coverage will pay for the repair of your vehicle after you pay your deductible.
Don’t be fooled into believing that this “full” coverage insures you or the ones you love when they are injured in an accident. Again, this coverage has nothing to do with you, your family, or any injuries. It only covers damage to a car.
There are other coverage types out there with their own subtle nuances. These and other ways in which the coverages listed above are applicable to injury claims are too detailed to list in a single post.
For detailed discussions about these coverages, please feel free to contact our office for a free consultation. We are also happy to discuss these issues with you and your insurance agent, who should be happy to figure out a great insurance plan to fit your needs and budget.
Questions or comments on the information we listed above? Let us know in the comments.
Marty is a former criminal prosecutor in the Cascade County Attorney’s Office and now uses that experience to defend those accused of crimes. A University of Montana School of Law graduate, Marty focuses his practice on personal injury and criminal defense and is a premier DUI defense attorney. He is also well versed in the insurance claims industry and has negotiated significant settlements with nearly every major insurance company.