For years we have heard clients tell us they believe they have “full coverage” insurance on the vehicle that was destroyed by a negligent driver. Unfortunately, insurance agents who sell auto policies many times fail to effectively describe the benefits and coverage the policy actually contains that they are recommending to a prospective consumer. Whatever the reason, the reality is many of our clients do not have full coverage, or anything close to it. This will only be a problem when they are in a car accident.
The primary benefits that will greatly assist one in a car accident caused by a negligent driver are the following: 1) Underinsured Motorist (UIM); 2) Uninsured Motorist (UM); and 3) Medical Payment (MP).
UIM coverage is coverage available when the driver who injured you caused more damages (injuries) than the monetary limit of her Bodily Injury (BI) liability coverage can pay. Multiple times each year our clients are injured by someone who has the minimum BI limit required by the state of Arizona, $25,000.00. An ambulance ride and two day hospital stay necessitated by a violent car accident can easily amount to more than $25,000.00. If the negligent driver has a BI policy of only $25,000.00, and you do not possess UIM, than your total gross recovery will very likely be only $25,000.00.
We get it. It is not fair that a negligent driver causes high damages and “gets away” with only paying $25,000.00. But by protecting yourself and family with UIM coverage of at least $100,000.00, you can have the assurance that if you are injured in a car accident by a negligent driver with only $25,000.00, your recovery will be much closer to the amount of your total damages by purchasing UIM. You and your family are more important than the consequences of the negligent driver.
What is worse than a negligent driver who only has $25,000.00 in BI coverage? A negligent driver with no insurance at all. It happens all the time. The driver failed to pay his insurance premium. Poof. There goes his coverage. He then causes a car accident with you causing injury to you and your occupants. The vast majority of the time the negligent driver who does not pay his premium is because of a lack of resources. So, suing the driver to potentially obtain a successful judgment against the driver will be a futile effort as the driver with no resources cannot pay the judgment either.
The safer and much more efficient path is to make a claim against your own policy for UM benefits. A smart driver is prepared for any scenario, including negligent drivers who cause a car accident and are not insured. Protect you and your family with UM coverage which will pay you for your damages caused by another.
The final insurance coverage we all to often discover that our clients do not possess is MP. MP is coverage which will pay for the medical bills of all occupants of your vehicle incurred as a result of a car accident, regardless of who caused the accident. This is called “no fault” insurance. Since most people have their own health insurance coverage which is used regardless of the coverage status of the negligent driver, MP is helpful to pay the deductibles, co-pays, and insurance liens. We often call MP “free money.” The limit most people possess is $5,000.00 per occupant, literally costing pennies per month. Ultimately, MP allows the net recovery of our clients to be larger, which is significant in the smaller claims.
I hope this article provides some insight on the importance of UIM, UM, and MP coverages on your vehicle.