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You Have Enough Insurance To Cover Others In The Event Of An Accident However, Do You Have Enough Insurance To Cover Yourself In The Event The Accident Is The Fault Of An Uninsured Or Under-Insured Driver?
In California, like most states, you are required to carry liability insurance on your vehicle if you plan on operating it on public thoroughfares. At present, the minimum liability coverage permitted by law is $15,000/$30,000. The $15,000 figure is a per injured party sum while the $30,000 figure is an aggregate sum meant to provide coverage to two or more injured persons. Liability insurance is available in higher amounts such as $30,000/$60,000, $100,000/$300,000 and $250,000/$500,000. The cost of increasing your limits from $100,000/$300,000 to $250,000/$500,000, for example, is relatively slight compared with the added protection it affords you in the event of a loss. This is especially true given the skyrocketing cost of healthcare.
Liability insurance is coverage you are required to obtain to protect others on the road from any act of negligence by you. It DOES NOT afford you, as the operator of the vehicle, any coverage whatsoever in the event you are at fault for the accident in which you are injured. Only medical payments coverage (often available in limits of $1000 and $5000) will provide you protection in the event your injuries stem from your own negligence. What happens however, if you are not at fault for an accident in which you are injured, perhaps seriously, and the responsible party is either uninsured or under-insured? The answer is simple, hope and pray you have enough UM/UIM coverage.
Most never appreciate the significance of UM/UIM coverage, the benefits it affords them or the import of maintaining high UM/UIM limits until after becoming involved in an accident. Why is it you would feel compelled to carry liability coverage with $250,000/$500,000 limits to protect others, yet feel it appropriate to maintain UM/UIM limits of only $15,000/$30,000 to protect yourself? While high liability limits may insure that your personal assets are sufficiently protected in the event you are at fault in injuring another in an accident, what happens to your assets when you are seriously injured as a result of an uninsured or under-insured driver's negligence and either do not have health insurance, have insufficient health insurance, and no long-term care coverage? Stated simply, your assets are exposed!
If you are injured as a result of the actions of an uninsured or under-insured driver, your UM/UIM coverage will cover you. In instances where the at-fault driver was uninsured, your UM coverage kicks in immediately. In instances where the at-fault driver was under-insured (with liability coverage insufficient to compensate you for your injuries), your UIM coverage kicks in after his payment of policy limits and only to the extent your UIM limits exceed his liability limits. For example, if the under-insured at-fault driver maintained a policy of insurance with $15,000/$30,000 in liability coverage and your injuries had a value of $100,000, undoubtedly, his carrier would tender his policy limits to you. If you have UIM coverage with limits of $100,000/$300,000, the $15,000 you received from the at-fault under-insured driver is deducted from the $100,000 leaving you $85,000 in UIM coverage; an amount sufficient, with the $15,000 already received, to fully compensate you for your injuries. If however, you have UIM coverage with limits of $15,000/$30,000 and already received $15,000 from the at-fault uninsured driver, YOU HAVE NO UIM coverage available.
The example in the preceding paragraph illustrates the importance of maintaining high UM/UIM limits. Often times, we see accident victims who have only catastrophic health insurance policies (policies with huge deductibles) or policies with benefit limitations. Rarely do we see accident victims who had the foresight to secure long-term care coverage. The absence of healthcare insurance, insurance limitations and no long-term care coverage could prove financially disastrous to anyone with insufficient levels of UM/UIM coverage.
At EISENBERG LAW FIRM, we advise all our clients to maintain the highest level of UM/UIM coverage possible. The cost of UM/UIM coverage is considerably less than liability insurance but as important, if not more important, to you. We would encourage you to review your automobile policies to determine your UM/UIM coverage and increase your limits if you believe them too low. We would also encourage you to obtain and/or increase you med-pay coverage as well. Like UM/UIM coverage, med-pay coverage is considerably less costly than other forms of coverage available to you. Finally, to the extent you are a homeowner and/or financially able, we would encourage you to maintain a liability umbrella (especially if you have young driver's in your family operating vehicles on your policy), to protect your home and other assets in the event of an at-fault loss.
EISENBERG LAW FIRM is not an insurance agency, insurance broker or insurance company and does not offer insurance advice. Please consult your insurance specialist for advice on all your insurance needs and any concerns you may have with any policies of insurance you maintain at this time.
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