Why uninsured motorist coverage is vital for protecting your family following a car accident
Driving without insurance is like strapping a live bomb to your car and hoping it doesn’t go off before you get to work.
Car accidents cost billions each year, and nearly every state in the U.S. requires motorists to carry automobile insurance. Most people automatically decide to get insurance on their own, as it seems logical – you buy a car and you don’t want the investment to be wasted, so you buy insurance.
However, some people look at the climbing rates and decide to chance it. (Especially motorcycle drivers.) Fulfilling your own legal obligation to carry insurance coverage can provide some modicum of security, but if you’re in an accident with an uninsured or underinsured motorist, you may be left wondering how medical and repair bills will be paid.
Many drivers decide to drive with just the mandatory minimum required and play a daily game of Russian roulette.
For instance, New Hampshire and Florida don’t even require bodily injury minimum insurance coverage, so they could drive without them. As long as they’re careful, it won’t be a problem!
What minimum liability coverage means for the other person (which could be you)
Even if the other driver carries the minimum required by their state for car insurance, you could be in a real pickle. Let's take a look at what this minimum coverage law could mean to you and your family.
For example, let's say that a state's minimum requirement is $20,000 of liability coverage. A person crashes into you and you are severely injured. The other person is at fault and they are covered with the minimum policy that the law allows.
This means that no matter high your medical expenses are, and no matter how much damage was done to your car, the insurance company will only have to pay $20,000.
If you have $60,000 in medical bills, you are already $40,000 in the hole.
How often do people really get into car accidents, right?
To answer that question: There is an average of 3,287 deaths each day because of car accidents, equaling approximately 1.3 million per year. For the survivors, it’s between 20 and 50 million injuries and disabilities per year. So... it’s rather substantial.
Meanwhile, how many uninsured drivers are there? According to the Insurance Information Institute, about one in eight drivers are uninsured. This means out of eight cars, one of them could be the car that doesn’t have adequate coverage for your medical bills if it hits you.
Luckily, most car insurance policies plan ahead for this eventuality. They know that even if you drive as carefully as you can, most accidents happen because of other people.
How insurance helps after an auto accident with an uninsured driver
The purpose of a car insurance policy is to prevent an auto accident from causing a significant hardship in your life beyond the emotional and physical trauma car wrecks already carry.
Medical bills can become astronomical, and if lawyers get involved, a good portion of the insurance policy proceeds can end up paying their office. However, the point of those insurance policies is so you don’t have to chase down the other driver, sue him personally, search for what he owns, freeze those assets, attach them with a court order and get a check for $60 a week for the rest of his natural life.
An uninsured driver likely doesn’t have much in the way of assets, so suing him won’t achieve anything besides satisfying your sense of vengeance.
The better way to handle this sort of situation is to work with your own insurance company and take out a policy that foresees this sort of scenario, which is called an “underinsurance policy.” There are even “uninsured motorist” policies as well.
These anticipate that you might be hit by someone who isn’t insured properly and allow you to collect against your own insurance company for a predetermined amount or for the difference between what the driver is insured for and what you still need to cover your medical bills.
Steps to take with insurance after a car accident
If you've been in a car accident with an uninsured motorist or a driver whose insurance policy isn't sufficient to cover your injuries and damages, take the following steps:
- Whether or not the other driver has an insurance policy, your first order of business after making sure you’re physically sound is to get his contact information.If he does have a policy but informs you it won't cover your damages, you should still take policy information from him. A car accident attorney can help you understand what, if any, benefits you are entitled to from the other driver's existing policy.
- Check with your own insurance company about the terms of your uninsured motorist policy. They may have specific requirements such as a signed statement from the other driver admitting his lack of car insurance coverage. Your attorney will be able to help you with this.
- Once you have obtained all relevant information, including statements from the other driver and police reports where applicable, submit your claim to your own car insurance company. All automobile insurance providers are different.Submitting a claim may be all that's required to receive the benefits available to you. If this is not the case, however, you may need to involve an auto accident attorney.
- Your most important tool after a car accident with an uninsured motorist is documentation, so securing contact information and obtaining statements from the other driver, the police officer on the scene and any witnesses is key to receiving compensation for your injuries and property damage. Include photos of the scene as well if you can.
- Additionally, make sure you get copies of not only your medical bills, but also any records, test results, and particularly doctor’s notes from your medical chart stating your physician’s affirmation that the car accident was in fact the cause of your injuries. Records of your car repairs and copies of relevant bills should also be included.
What if I don’t have the right insurance?
It pays to be prepared. While each state has its own requirements, it’s best to have as much insurance as possible in order to know that every eventuality is covered. You don’t want to get hit, go to your insurance company with all the bills and be told that you have to pay them. Why should you pay when someone else did the damage?
It will depend on where the accident occurred – a fault or no-fault state, which will determine whether you can submit your bills to the other driver’s insurance company or whether you need to sue him personally to cover your bills. This can obviously get complicated and will be a long, drawn-out process.
It will get even more complicated in a hit-and-run. What if the other driver just leaves you there and you don’t have underinsurance or uninsurance policies? Then you will have to foot the considerable bills yourself.
How much uninsured motorist coverage (UM/UIM) do you need?
The WSJ says: A good rule of thumb is to make sure you’re covered for an amount equal to the total value of your assets. (Add up the dollar values of your house, your car, savings and investments).
Edmunds.com: Insurance experts generally recommended that you purchase 100/300 limits of bodily injury liability (meaning $100,000 for one person in an accident and $300,000 for all people injured in one accident).
Uninsured or underinsured motorist coverage also might be a wise buy even if you have full medical coverage, since it could pay for your pain and suffering damages.
So, how much would it cost to up your limits? The NY Times says, “the industry-supported Insurance Information Institute figures it costs about $200 extra annually per vehicle to take your liability limit from $50,000 to $1 million per accident. Taken together, that’s not an enormous amount on a percentage basis on top of what may be an annual insurance bill of $1,000 or more.
In the best case scenario, an uninsured motorist coverage won’t have a significant monthly premium, should take care of your bills and will prevent financial hardship after a car accident.
If this isn't how the situation plays out, you may need the help of a car accident attorney. Check out the Enjuris law firm directory if you need help finding one!