Car insurance: Are You Really Fully Covered?

If you aren’t selecting optional coverage for uninsured and underinsured motorists, then you have a large gap in your car insurance policy.

When you buy a car insurance policy, there are a lot of things to decide.

First, there’s the huge decision on how much coverage you want and can pay for, compared to the state minimum amount of coverage that you must buy. The minimum coverage is the cheapest, at $15,000 per person, $30,000 per accident, but realistically it doesn’t do much to cover your injuries or medical bills if you are hurt in a crash. Much higher limits, such as $100,000 per person, $300,000 per accident, are a fiscally sound idea to protect you and your family.

Then in Pennsylvania, you have to decide whether you want full tort or limited tort coverage, which give you options for retaining your rights to sue in an accident. We described that last week in a blog post on full and limited tort coverage here on the MyPhillyLawyer blog.

The aftermath of a two-vehicle crash. Image credit: © iStockphoto.com/tillsonburg

The aftermath of a two-vehicle crash. Image credit: © iStockphoto.com/tillsonburg

And believe it or not, in Pennsylvania and many other states, insurance to protect you from other drivers who either don’t have insurance, or don’t have enough insurance, isn’t mandatory. So if you don’t select it when talking to your insurance agent, you won’t have such coverage.

That’s definitely not something you want to find out after you are involved in an accident caused by an underinsured or uninsured motorist.

Ensuring that you have coverage to protect you and your family from uninsured motorists (UM) and underinsured motorists (UIM) should be a part of the annual insurance review that you should do with your insurance agent to keep your coverage aligned with your family’s needs.

“It’s extremely critical to have UM and UIM coverage because in the event that you are involved in an automobile accident and the other driver is at fault and has no or not enough insurance, whatever little coverage they have will not cover your injuries and claims,” says John Logue, an attorney with MyPhillyLawyer.  “If you have UM and UIM coverage, then you can fall back on your own policy coverage to provide you with the full compensation that you deserve for your serious injuries.”

So how much UM and UIM coverage should you buy?

“It’s good to have the best UIM and UM coverage that you can afford,” Logue says. “It’s going to be a more expensive premium, but it’s definitely worth it.”

A good place to start is with at least $50,000 per person, $100,000 per accident, he says. “If you can get $100,000/$300,000 if you can afford it, all the better.”

In a related note, the minimum auto insurance coverage levels in Pennsylvania are presently under review in the state legislature. The certainty of its success is not yet known.

State Sen. Don White, (R-Indiana County), the chairman of the Senate Banking and Insurance Committee and an insurance agent,  introduced Senate Bill 1339 last year that would raise the state minimum coverage levels from $15,000 per person to $30,000 per person and from $30,000 per accident to $60,000.

The bill was introduced because the state minimum coverage levels haven’t been increased to keep up with inflation and are antiquated, White said at a hearing on the bill last month. The existing minimum coverages “no longer reflect the current economy,” he said in a recording of the hearing that is posted on his Web site. “State statutes seldom include provisions that recognize the impact inflation can have” … and “that’s definitely the case with these minimum standards. If we neglect to review these minimum standards decades after they are set, then I don’t think we are doing our job.”

Critics are already arguing that mandated higher minimum insurance coverage is just a ploy for insurance companies to collect more premiums from their customers.

In this case, though, higher minimum coverage for all drivers could be a good start to better protect everyone on the road.