We all know that we need automobile insurance. However, most people do not put much time in deciding what types of liability insurance they need and what limits to purchase.
Bodily injury liability coverage (BI) and uninsured/underinsured motorist (UM) coverage are not required by law. Therefore, most people believe they have “full coverage” when
in reality they do not.
There are several different coverages that are contained within your automobile insurance policy. Coverage such as bodily injury liability protects you, the insured, from claims filed against you while coverage such as uninsured/underinsured motorist protects you from damages you sustain due to the negligence of others.
Bodily injury liability coverage is designed to protect the insured from claims where the
insured is at fault in an accident and causes damages/injuries to others. This coverage
can be purchased in several different increments, for example $25,000/$50,000/$25,000
or $100,000/$300,000/$50,000.
The first number represents how much the insurance company will pay per person
injured in an accident and the second number represents how much the insurance
company will pay for all people injured in an accident. The third number represents how
much the insurance company will pay for property damage caused by the insured to
others.
Uninsured/underinsured motorist coverage can be purchased in the same limits as your
bodily injury liability coverage. UM coverage protects you, the insured, from injuries
and medical expenses caused by the negligence of others who do not have sufficient
liability coverage. In order to collect uninsured/underinsured motorist benefits the
insured has to demonstrate that the other driver was at fault for the accident and caused
the injuries.
The insurance company has an adversarial relationship with its insured in this type of
insurance, therefore it is often beneficial for the insured to retain an attorney to represent
his or her interests. A large percentage of drivers do not carry bodily injury liability
insurance or sufficient liability limits and therefore, uninsured/underinsured motorist
coverage is a very important coverage to purchase in order to protect your own assets and
well being.
Oftentimes, someone is injured in an automobile accident and is in need of insurance
coverage to protect them from injuries and damages sustained in the accident. If there is
no coverage or insufficient coverage, the injured person can go uncompensated for
serious injuries, medical expenses and lost wages. If the at fault party does not have
insurance or has limits that are too low they can be faced with a personal liability
exposure. This means that their personal assets may be at risk to compensate the injured
victim. Therefore, it is beneficial to purchase as much BI and UM coverage as you can
afford and an amount which is consistent with your assets and earning ability. You do
not want to be liable for a claim against you that exceeds the amount of insurance you
purchased. You could be putting your personal assets at risk. Likewise, you do not want
to incur medical bills and lost wages due to the negligence of another who does not have
BI coverage sufficient to compensate you. Either scenario can lead to financial hardship.
In conclusion, do not leave yourself unprotected in the event you sustain serious injuries,
medical expenses and lost wages. Furthermore, do not go unprotected for injuries or
damages you may cause to others. Consult an attorney or insurance agent and obtain an
insurance assessment before you are faced with either scenario.
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