DO YOU REALLY KNOW WHAT KIND OF INSURANCE YOU HAVE?
SELECTING YOUR PERSONAL MOTOR VEHICLE AUTOMOBILE INSURANCE
Our society is completely reliant on the Automobile. More cars, trucks and SUVs are put on the road every day. With the consequent increase in road travel comes the increase in the potential for motor vehicle accidents. I want to be sure that you have made the right decisions to best protect yourself and your loved ones before such an accident.
I find that most of the people who come in to see me after a motor vehicle accident believed that they were driving around with “full coverage.” However, invariably when we sit down to review their automobile insurance policies we determine that they failed to obtain proper coverage and in some cases actually signed away their rights and their family members rights to full protection. It is impossible to fix these deficiencies after the fact. I have seen so much of this lately that I am compelled to write to you to help you with your decision making process.
Please be mindful of the following factors when determining what automobile insurance coverage you really have:
THERE IS NO SUCH THING AS “FULL COVERAGE.”
The term “full coverage” does not exist under the Motor Vehicle Laws of either Pennsylvania or New Jersey. “Full Coverage” can mean many things to many people. Therefore, there is no standard for “Full Coverage.” You must look further into your insurance policy to determine whether or not you have full protection.
DO NOT SIGN AWAY YOUR RIGHTS OR YOUR FAMILY MEMBERS RIGHTS TO RECOVER FOR BODILY INJURIES BY SELECTING LIMITING COVERAGE.
“Oh, that’s what that means” is the typical response that I receive from my prospective clients following a motor vehicle accident. “That” is either Limited Tort in Pennsylvania, or Verbal Threshold in New Jersey.
In Pennsylvania, Limited Tort means that you, (or a family member who lives with you), agreed to waive the right to recover for non-economic damages like pain and suffering unless you suffered from a “serious impairment of bodily function” from a motor vehicle accident. The law does not require that you have a permanent injury, however, permanency is a factor that is considered in determining if you can get past the Limited Tort threshold.
Similarly, in New Jersey Verbal Threshold means that you, (or a resident relative) agreed to waive the right to recover for non-economic damages like pain and suffering unless you suffered from a “permanent injury” or similar severe consequence from a motor vehicle accident.
Even when my clients sustain injuries that meet or exceed these standards, the majority of the insurance companies refuse to concede, continue to fight the issue, and argue that the mere existence of the issue reduces the overall true value of the claim.
The bottom line is that the money that you save on premium payments is small compared to the detrimental effect of the waiver in the event that you suffer an injury.
If you have either Limited Tort or Verbal Threshold, I strongly recommend that you contact your insurance agent immediately to change your Limited Tort coverage to “Full Tort” coverage if you are insured in Pennsylvania; or your Verbal Threshold coverage to “Zero Threshold” coverage if you are insured in New Jersey.
THE MINIMUM AUTOMOBILE INSURANCE POLICY PROTECTS STRANGERS, BUT YOU MUST ALSO PROTECT YOURSELF AND YOUR FAMILY BY SELECTING UNINSURED AND UNDERINSURED MOTORISTS COVERAGE.
The most basic mandatory automobile insurance coverage is called Bodily Injury coverage. This is insurance coverage that you are required to buy to compensate strangers for injuries that arise from accidents when you or your vehicle is determined to be at fault for the accident.
Your insurance agent is required by law to offer you both Uninsured Motorist Coverage (“UM”) and Underinsured Motorist Coverage (“UIM”) in an amount that is equal to the Bodily Injury coverage that you are required to purchase for strangers. This is the coverage that applies if you, your resident family members, and/or your passengers are injured by a vehicle driven without insurance or without enough insurance to cover the loss.
Problems arise in UM and UIM situations because you may refuse or reduce UM and UIM coverages, yet still be in compliance with the state mandated minimum insurance requirements. People often do not understand the significance what they are giving up in an effort to save a small amount of money on their automobile insurance premium. The fact of the matter is that one in thirteen vehicles on the road today do not carry any insurance. Therefore the risk of being injured by someone without insurance is very real.
Uninsured Motorist and Underinsured Motorist coverages are much cheaper to purchase than Bodily Injury coverage. Therefore, you should protect yourself and your family at least as much as you are protecting strangers by obtaining UM and UIM coverage in an amount equal to your bodily injury limits. It is a relatively inexpensive way of protecting against a real risk.
Pennsylvania permits the additional option of “Stacking” your UM and UIM coverages. Stacking increases your UM and UIM coverages by the number of qualifying vehicles in your household. I highly recommend that you retain the Stacking option.
THE DECISIONS THAT YOU MAKE CAN BE BINDING UPON ALL OF YOUR RELATIVES WHO RESIDE WITH YOU WHETHER OR NOT THEY ARE NAMED ON THE POLICY.
In Pennsylvania and in New Jersey, the decisions that you make in selecting your automobile insurance coverages will be forced upon all of the relatives with whom you reside. If you waive any of these rights for yourself, you will be waiving their rights as well whether or not they had any input in the transaction. Call us with any questions that you may have about what coverages you actually have in your personal automobile insurance policy.