It is impossible to discuss personal injury law without a basic knowledge of insurance. The aftermath of a crash is the wrong time to begin understanding insurance. This entry will introduce you to the basics of car insurance. If you look at your policy, you should have a document labeled as a declarations page. This is a summary of all of the different coverages that you have purchased and tells you the limits, or maximum amount an insurer will pay, of your policy.
Bodily Injury Liability:
First, you should look at the bodily injury liability coverage. This coverage is the maximum your insurance company will pay to someone that was injured due to your error. This could be a person in a car that you strike, it could be a pedestrian, or it could be a passenger in your car. An example of this is, if you rear end someone or run a red light and strike another vehicle, it is the bodily injury liability coverage you purchased from your insurer that is paid to cover the other driver’s medical bills, lost wages, and pain and suffering.
There are two numbers associated with this coverage. For example, your coverage may be listed as $50,000/$100,000, which means that any single person injured due to your negligence (or fault) may receive up to $50,000; however, your policy will not pay out more than a total of $100,000, no matter how many people are injured.
Property Damage Liability:
You also have property damage liability coverage, which pays for any damage you may do to someone else’s vehicle, telephone pole, or structure. This is a single limit, unlike the bodily injury liability, and therefore there is a single pool of money to satisfy claims against you.
Uninsured Motorist Bodily Injury Coverage:
This coverage is called a first-party coverage and protects you, the people in your car, or qualified people in your household in the event you are injured by someone who does not have insurance to pay your claim. To qualify for this coverage, you must be struck by an uninsured motorist and you cannot be at fault. This is also the coverage that protects you in a hit and run accident.
In addition to uninsured motorists, your uninsured motorist bodily injury coverage will provide coverage for underinsured motorists. An underinsured motorist is a driver that does not carry enough insurance to cover your whole claim. If your uninsured motorist bodily injury limits are higher than the underinsured motorist’s bodily injury limits, then you can make a claim on your own policy. An example is an at fault-driver with a policy limit of $50,000 per person, when you have a claim worth $100,000 as well as uninsured motorist coverage of $100,000. In such an event, the at-fault driver’s policy will pay the first $50,000, and your own insurance will pay the second $50,000. Don’t worry, your insurance rate will not go up.
Uninsured Motorist Property Damage Coverage:
There is not much to discuss, it is what it sounds like. If an uninsured motorist strikes your vehicle, you do not have to use your collision coverage, you can use your uninsured motorist property damage coverage. There is usually a deductible associated with it.
Personal Injury Protection:
While bodily injury liability and uninsured motorist bodily injury coverages are required by law, there are other coverages that are optional. You may have personal injury protection (PIP) coverage. This is a no-fault policy, meaning it will pay no matter who is at fault for the accident. PIP will pay for medical bills and lost wages (reduced by 15%) up to the policy limit. Policy limits are usually between $2,500 to $10,000 in $2,500 increments. To collect your PIP benefits, you must file an application with your insurance company within one year of the accident.
Collision and Comprehensive:
Collision and comprehensive coverages are also optional. Collision will pay for the repair or replacement of your vehicle in the event of a crash. Comprehensive will pay for the repair or replacement of your vehicle in the event of a loss that is not a crash (i.e. theft or vandalism). You likely will have a deductible to pay.
By Craig I. Meyers, Esq.