If you are a creature of habit, change can be difficult. For example, I fill up my car with gas at the same gas station even though I pass by other gas stations with cheaper gas. I go to the same place for a haircut because I know what to expect.
I’ve banked with the same national bank for 25 years because I presume it will be too cumbersome to change accounts, bill pay etc. While my reasons may be justified and be of little consequence to my daily life or routines, in my nearly 15 years of practice as a personal injury attorney there are some situations that require a second look or change of course.
Following a car accident, clients are commonly confused as to how their personal auto insurance coverages work or protect them. Clients sit in my conference room and assume that the insurance coverage they have purchased “years ago” will help them through a difficult situation. More importantly, the stakes become even more concerning if the client has been significantly injured as a result of someone else’s negligent driving.
Without getting too technical, the laws governing car accidents in Minnesota are intended to help legitimately injured individuals with medical bills and losses in a timely fashion. Minnesota is a “No-Fault” state. What this really means is that after an auto accident with injuries, your own personal auto car insurance is on the hook for your accident related medical bills and wage loss. This may sound odd since someone else caused the accident but again remember that this is where the “No-Fault” kicks in. Most standard auto policies will provide $20,000 in medical and $20,000 wage loss benefits for your injuries. If you or a family member has been significantly injured, you may have the right to eventually file a claim against the person who caused the accident for future expenses. At that point, you will be relying on the amount of insurance coverage the negligent person has to cover your ongoing expenses, pain and suffering etc. This can be frustrating because you can’t control how much insurance coverage the negligent person had or if he or she even had insurance. This brings me back to my original point is that everyone who wants control over such bad situation should start with a review of your own auto insurance policy with your agent. This may be more difficult with some online insurance companies, but there are plenty of insurance companies with standard brick and mortar offices in your community.
Here are a few questions I recommend that you ask your agent:
- Can I increase my own No-Fault coverage? The answer is yes. If you have more than one vehicle you can “stack” the policies. For example, one car will provide $20K in medical and $20K in wage loss. If you have two cars, and purchase stacking, you’d have $40K in medical and 40K in wage loss. I’ve had clients with 5 stacked policies. Stacking policies is usually inexpensive and provides significant additional protection. For whatever reason, many agents don’t discuss this with their clients. ASK!
- How much insurance coverage do I have if I get hit by a negligent driver, perhaps a drunk driver who does not have enough insurance coverage? This coverage is call UIM or underinsured motorist coverage. It protects you if you are injured by someone with minimal insurance coverage or not enough insurance coverage to cover your injuries. Again, you control the amount. Naturally, the more coverage you have the more it costs. That being said, $100,000 should be the absolute minimum anyone should purchase.
- What happens if you are injured by someone without any auto insurance? This type of coverage is called UM or uninsured motorist coverage. It protects you if you are injured in an auto accident caused by a negligent driver. Again, $100,000 should be the minimum.
- What if I cause and accident and injure someone? This is called liability coverage or sometimes referred to as BI coverage. Again, protect yourself. Sit down with your agent and give them an idea as to your assets, income etc. to help you decide what amount of protection you need. If you are a poor college student with more student loans than assets, then typically minimal coverage is what you can afford. Similarly, if you have a good income, assets, properties then your liability coverage will need to significantly higher to ensure that you are protected in the event you significantly injure someone in a car accident.
- The final questions I’d ask your agent is whether or not an umbrella liability policy makes sense for you. An umbrella policy is exactly what it sounds like, it’s an added level of protection. It will typically provide liability coverage for your negligence. Most policies start at 1 million dollars and are quite affordable. The “umbrella” will sometimes attach to your home owners’ policy too adding more protection for incidents not involving your automobiles.
Again, be proactive with your agent. Too often clients are in my office and when we look at their auto insurance policies we notice that the coverages have not been changed for years. The amounts that would have been appropriate years ago are either too high (expensive) or most often not high enough now. This review has to be requested by you as most agents work hard to sell the policy but don’t do as good of job updating or suggesting changes. Yes, there are some agents that are better at this than others. The point is that the time to make changes to your insurance coverage is not after the car accident occurs…at that point it’s too late and your stuck with whatever coverage you have and whatever coverage the person that injured you had at the time.