Automobile Insurance

What automobile insurance coverages and limits do you have? If you do not know, now is the time to find out rather than at the time of a serious accident. If you do know and you are underinsured or do not have proper coverage, now is the time to add coverages and increase limits.

Look at the Declarations page of your insurance policy. This page shows your coverages, limits of coverage and the amount you pay for each coverage. If you cannot find this sheet, call your insurance agent.

Definitions

There are three important coverages in accidents involving injuries:

1. Bodily Injury Liability: Covers injury or death caused by you as a driver or anyone driving your car with your permission.

2. Underinsured and Uninsured Motorist: Protects you and others in your car if injured by a negligent driver who does not have bodily injury liability insurance or has too little insurance. Typically, underinsured and uninsured motorist claims involve lost wages, medical bills and compensation for injuries.

3. Medical Payment: Pays your medical bills and the medical bills of each injured person in your car, regardless of who is at fault in causing the accident.

Recommended Coverages And Limits

To be adequately insured, I recommend two insurance policies. The first is your regular automobile insurance and the second insurance is an umbrella or excess policy.

Your regular automobile insurance should have bodily injury liability coverage, underinsured motorist coverage and uninsured motorist coverage. The limits should be at least $100,000 per person and $300,000 per occurrence for each coverage. Medical payment coverage should be at least $10,000 for each injured person. Property damage insurance should be for $100,000.

The umbrella insurance policy should have limits of $1 million and include bodily injury liability coverage, underinsured motorist coverage, uninsured motorist coverage, and property damage coverage. Your umbrella insurance will pay losses which are over the limits of your automobile insurance, up to the coverage limit of $1 million.

The cost of a $1 million umbrella insurance policy is approximately $120 a year and up, depending on the number of drivers in your household, driving records and number of vehicles. This is an added cost, but suppose a negligent driver who had no insurance caused you and your family to suffer catastrophic injuries. You would at least have insurance coverage of $1 million.

You are underinsured if you only have one automobile insurance policy with coverage limits of $100,000 per person and $300,000 per occurrence. You are inadequately insured if you do not have underinsured and uninsured motorist coverages.

If you cannot afford an umbrella policy, attempt to increase your bodily injury liability limit, your underinsured motorist limit, and uninsured motorist limit to $250,000 per person and $500,000 per occurrence. The cost of increasing your limits is surprisingly little. You still will be underinsured, but much better off with the higher limits.

Under no circumstances should your underinsured and uninsured motorist limits be less than your bodily injury liability limits. Do not insure one vehicle for less than the other, even if you only “occasionally” drive that vehicle.

Call Your Insurance Agent Today

Call today and tell your agent that you want a $1 million umbrella policy. If you absolutely cannot afford a $1 million umbrella policy, then increase your bodily injury liability limit, your underinsured motorist limit, and your uninsured motorist limit to $250,000 per person and $500,000 per occurrence.

Remember, automobile accidents do not always happen to the other guy. The dollars invested in buying the proper coverages and limits may be the best investment you will ever make.