Auto Coverage You Need to Have

Uninsured Motorist

Uninsured motorist (UM) is another form of coverage sold with most auto insurance policies. Basically it provides that in the event you are hurt by a driver who is without insurance coverage, you can bring a claim against your own insurance company for the losses you suffered due to the accident. In some ways it is as if your insurance company insured the responsible driver.

The amount of coverage varies. Most companies refuse to sell an amount any bigger than the amount of liability coverage provided under the auto policy. Commonly, if you have a liability policy which provides coverage of 25/50, the most uninsured motorist coverage you can purchase is 25/50 for you and your family. Insurance companies will, however, often sell amounts less than the amount of the liability coverage. In this example, that would mean you may have UM coverage of only 15/30 even though you have 25/50 in liability coverage.

Uninsured motorist coverage is some of the cheapest coverage available and is something designed to protect you and your family. Only after someone is involved in an accident with an uninsured driver do they realize the importance of this coverage. Many well-informed people will often carry very high liability coverage so they can get large uninsured motorist coverage.

Most uninsured motorist policies require claim be brought in a certain period of time. This is usually one year. When a statute of limitations is longer than a year, many people wait too long. If you are involved in an accident with a driver who lacks insurance coverage, consult your policy and make sure you bring a claim within the time specified in your policy.

Underinsured Motorist Coverage

Underinsured motorist coverage (UIM), like uninsured motorist coverage, is a form of coverage frequently contained in auto insurance policies. It is different than uninsured motorist coverage. It provides coverage if the party who is responsible for causing you injury is without high enough liability coverage to wholly pay you for your claim. As an example, if your claim possessed a value of $50,000 and the person who hit you had only $15,000 in coverage, you would receive a check from the responsible insurance company which is $35,000 less than the value of your claim. If, however, you possess underinsured motorist coverage in the amount of $50,000, you would be able to collect the remaining $35,000 from your own insurance company.

Underinsured and uninsured motorist coverage are generally sold with the same limits. The amount which can be collected under underinsured motorist coverage, however, varies from state to state. Some states, like California, provide for offset. As an example, if you possessed an injury claim for $100,000 and you and your underinsured motorist coverage was $50,000 with the responsible party having $15,000 in coverage, you would only be able to collect a total of $50,000, The responsible insurance company would pay $15,000 and your insurance company would pay $35,000 because it would take an offset for the $15,000 paid by the responsible party. Under this example, you would receive $50,000 less than the value of your case.

Some states refuse to allow insurance companies the right to offset. An example is Nevada. In Nevada, under the same set of circumstances, you would receive a total of $65,000, your policy payment of $50,000 and the $15,000 payment by the responsible insurance company. Some states find the offset provision cannot be enforced because the person who purchased the underinsured motorist coverage paid the premium for it and is entitled to full coverage. To enforce an offset provision makes the coverage uncertain and subject to the whim of how much insurance coverage is carried by the responsible driver.

Med Pay

Medical payments coverage (Med Pay) is frequently contained in an auto policy. It basically provides that medical expenses incurred as a result of an auto accident are paid by the auto insurance company. This coverage is sold in varying amounts generally ranging from $1,000 to $25,000. All policies require that you must see the doctor within a certain time following the accident. Most require you to see the doctor within 1 to 3 years.This normally means that the bill for the medical service must be "incurred" within the time limit. It isn't necessary you receive the bill within the time period, only that the medical service was given to you and the provider has a right to send a bill.

There are important differences between medical payment coverages. Some companies never require repayment of the amount in the event you are involved in an accident. Many companies, however, such as Allstate and Farmers, will attempt to take money from any settlement you receive! They will attempt to collect from money from the driver who caused your injury. This will reduce the amount you will be able to recover if you are involved in an accident in which someone else is at fault.

In some states this reimbursement of med pay cannot take place. The law of the state considers it as unfair since the person who purchased the policy already paid for the coverage and to allow the insurance company the right to get the money back is allowing the company to break its promise. Nevada, as an example, doesn't allow an insurance company to take back monies it promised to pay. California, on the other hand, does.

A Caution Regarding Medical Payments:

Your insurance company may attempt to restrict the payments for your medical treatment following an accident. This has recently become an unfortunate trend and you must be vigilant. An attorney, such as those at David Allen & Associates, can assist you in assuring that all of your medical bills are paid following an injury, because the last thing you need to worry about when you hurt is how to pay the bills.

Insurance Claims

There are all kinds of insurance claims. When you suffer injury and are considering bringing a claim for the injury, there are several forms of insurance coverage which may come into play.

• Uninsured Motorist
• Underinsured Motorist Coverage
• Life Insurance
• Auto Claims
• Automobile Property Damage Claims
• Bad Faith Insurance Claims