Most of us try to get away with buying the least amount of auto insurance possible. If you’re lucky, you’ve never had to make an auto insurance claim. So why pay for coverage you’ll never need, right? Not exactly. When you are getting a quote online, you may learn the price of the coverage but not necessarily the value.
Every state has minimum auto insurance requirements. In the state of Ohio, each vehicle must have a motor vehicle liability insurance policy that includes Bodily Injury Liability Coverage of $25,000 per person and $50,000 for all persons injured in any one accident as well as Property Damage Liability Coverage of $25,000 for injury to or destruction of property of others in any one accident. These coverages apply to accidents in which you are found to be at fault, but what happens if the other driver is at fault?
Imagine you are on your way home from work one evening. You are stopped briefly at a red light before the light changes to green and you proceed through the intersection. Unfortunately, a distracted driver in the lane bisecting yours has failed to observe their traffic light change from green, to yellow, to red. Their SUV plows into your passenger door, spinning your vehicle into another before finally coming to a stop. You are alive, but far from unharmed. Your car is totaled and you will face $40,000 is medical bills.
Fortunately, you have insurance.
While you can not control the behavior of those around you, you can reduce the risk of drowning in medical bills as a result of someone else’s negligence.
An estimated 20% of motorists are underinsured, while another 13% have no insurance at all.
What is Underinsured Motorist Coverage/Uninsured Motorist coverage?
In the event that you are involved in an accident and the other driver did not have any insurance, did not have the minimum insurance, or their insurance refuses to pay their claim, uninsured motorist or underinsured motorist coverage becomes effective.
In the example above, if the both you and the other driver only have minimum coverage, you would be forced to pay $15,000 in medical expenses out of pocket. UM/UIM coverage will help to cover your bodily injury expenses.
Does fault factor in?
Fault: This insurance only applies If the other driver is found to be at fault, which includes hit and run drivers. In states that are considered no fault, there is usually a threshold at which the claim becomes exempt from no-fault rules and UIM/UM coverage would be effective for the party not at fault. In Kentucky, the threshold is medical expenses exceeding $1,000.
What do you recommend?
We recommend adding UIM/UM coverage $100,000 per person and $300,000 per accident to your existing policy. The price will vary based on your age, driving history, and other factors, but the average driver can expect to see their rates increase by no more than $50/year.
Your insurance company may already recommend underinsured or uninsured motorist coverage, but some don’t for fear of incurring the expense of an underinsured driver’s recklessness. Don’t let that dissuade you from obtaining the coverage you need to protect your future. A few dollars now can save you from bankruptcy down the road. If you are involved in an accident, contact our office to discuss getting your life back on track.