Which insurance company and policy amount is best for you?
Do not choose the cheapest. While it may be tempting to save a buck, auto insurance is one policy that is likely to get used. And, if you have teen drivers in the house, your odds increase even more. If you choose a small policy or a company that is known for denying claims, the rest of your life might be turned upside down.
Uninsured or underinsured drivers
Since the State of Washington allows drivers to have a minimal policy of $25,000, many people incorrectly assume that the minimal policy will be enough in an accident. If you only tap another driver, that might be the case. In the case of a soft tissue injury to an otherwise healthy person, you might also be okay with a $25,000 policy. However, if the person suffers a concussion, lacerations, or any broken bones, there is no way that a $25,000 policy will be enough. A non-overnight visit to the Emergency Department is billed between $3500 to $10,000 depending on the imaging and the level that the hospital codes the visit. If the injured person is admitted to the hospital, the medical totals will immediately exceed $25,000 and that won’t include lost income, pain and suffering, and other damages.
If you choose to carry a $25,000 policy, be aware that the injured party can sue you for additional money. In many cases, the injured party will need to sue you to avoid their own bankruptcy due to medical bills and lost wages. And, if you have any assets, you will be in jeopardy of losing those assets.
What if you are hit by someone with a low policy who does not own a home or have any other assets?
The best way to protect yourself is to carry a high Uninsured/Underinsured policy as well as a Personal Injury Protection (PIP) policy. In the State of Washington, you automatically have PIP unless you signed to decline the coverage. If you have a soft tissue case with a lot of medical care, your injuries may not warrant a lawsuit yet you need more than $25,000 for adequate compensation. In the case where you have $10,000 PIP and also a $25,000 Underinsured Motorist policy, these back up policies can be used to reach the equivalent of $60,000 in care and compensation. A $60,000 soft tissue case is highly unlikely but, in the case of some unusual complications due to your injuries, you would have reasonable coverage to cover damages.
What if I have a policy with $100,000/$300,000 coverage but I own my home and have good income, am I still at risk?
While the odds of an accident occurring where the medical care requires more than $100,000 is lower than a small soft tissue case, we have had quite a few this year. In those cases, the at-fault driver is at risk of personal financial loss to cover the additional expenses. If you are concerned about losing your assets or income, it would be smart to talk to your insurance carrier about an umbrella policy.
What if I am hit by someone without insurance?
This is the worst. You have damage to your car and injuries to your body but you’re also paying for someone else’s negligence. Hopefully, you have great health insurance, PIP, Uninsured Motorist coverage and your auto policy is with a company that has a good reputation. Many will deny or delay claims for so long that you eventually give up trying to get help. The adjusters get bonuses for this so there is incentive to convince you to stop seeking care or compensation. If this happens to you, try contacting an attorney to help you with a bad faith insurance claim.
Be aware that nearly 1 in 5 drivers in Washington do not have insurance. So, you are playing Roulette every time you drive. That doesn’t account for those negligent drivers who cause serious injuries and only carry the lowest required coverage of $25,000. With a looming economic impact due to covid shutdowns, be prepared for those numbers to increase. Unfortunately, it will be up to you to make sure you are not at financial risk due to someone else’s negligence.
If you have any questions about this blog or are in need of a free consultation, please contact our office. We work evenings and weekends so don’t hesitate for peace of mind. 360-792-1000