Today we live in an “Amazon” world and we’ve come to expect that with a few clicks, we can buy just about anything. Car Insurance is no exception and you can easily go online and buy a policy in 15 minutes or less.

But how do you know which coverages are important and what level of coverage to buy? Sure, the websites will give you a brief description of what each coverage does, but they won’t advise you on which coverages to have and why they may or may not be important to you.

The fact is that the coverage limits you choose on your Auto Insurance policy can have far reaching consequences for you, your family and those around you.

It’s relatively harmless to adjust your deductibles or go without roadside assistance to save a few dollars a month. However, there are (at least) three coverages that you never want to be without and always select the highest limits that you can afford.

#1. Bodily Injury and Property Damage Liability-  This coverage pays out for injuries to people and damage to their vehicle or property should you be found to be at fault in an auto accident. Fortunately, all states require drivers to carry at least some amount of this coverage. Unfortunately, it’s normally a very low amount. In Washington the state minimum limits at $25,000 per person and $50,000 per accident for Bodily Injury and $10,000 for Property Damage.

Let’s think about that for a second- You are driving along and look down at your cell phone for just a second and look up to find the cars in front of you have stopped. You try to stop but hit the car in front of you at 20 mph. The car you hit has two people in it and both driver and passenger sustain back and neck injuries that requires a trip to the hospital and continued treatment. They hire an injury attorney and once the medical bills, time off from work, and pain and suffering cost are added up, there is now a $135,000 demand letter sent to your insurance company. Your insurance company pays out the $50,000 policy limit, but what happens with the remaining $85,000? The other party can now choose to come after your personal assets, put a lein on your house, and even garnish your wages for up to ten years. Yikes!

How do you avoid this potential financial catastrophe? Choose higher liability limit on your Auto Insurance policy of course! We always recommend carrying as much liability coverage as you can afford. We know it is important to you to protect your home, your family and your financial future. All of which needs to be seriously considered when you decide how much you can afford.  We urge you to buy the most you can possibly fit into your budget. Your agent shouldn’t mind one bit quoting you some higher limits so you can see the actual cost for your family.  We run those numbers all the time! You may also add a $1,000,000 Liability Umbrella policy to further protect your assets.

 

#2. Personal Injury Protection (PIP)- Pays out to cover any injuries for you and anyone in your car if you were hurt in an accident, regardless of who was at fault.

People who have “good” health insurance will often times question the need for this coverage because they assume that they can always fall back on their health insurance if they are injured in an accident.

However, I’ve seen many cases where client’s health insurance policies have coverage limitation and/or high deductibles and co-pays that end up leaving them with a substantial amount of medical bills to pay.

The other component of PIP that most people forget about is that it pays out for loss of income should you miss work due to your injuries. This can be a really big deal if you are unable to work for a few days or even weeks. There are other included coverages that not all health policies have either, be sure to ask your agent!

My best recommendation is to always max out your PIP coverage so you get the highest amount of coverage for your medical treatment and loss of income. If you or anyone in your vehicle are injured in an accident, you will be glad you did.

#3. Uninsured and Underinsured Motorist Coverage (UIM)- Remember how I mentioned that every state requires you to carry at least some level of Liability Insurance? It may come as a shock to you to hear that many people still drive without insurance, even though it’s against the law. In fact, in Washington an estimated 20% of drivers on the road today are driving without insurance. Of those that do have insurance, many only carry the state required minimums, which, as I illustrated earlier, often are not enough to cover your medical bills.

Luckily you can protect yourself from the unfortunate choices of others. Uninsured and Underinsured Motorist coverage will pay out for injuries to you and anyone in your car should you be hurt by a driver that either has no insurance or not enough insurance to cover your medical bills.

Driving a car that is valued at more than 10,000? That is the property damage limit in Washington.  Some bumpers on newer vehicles can get up to $10,000 pretty quickly.

Worse yet and very sadly, some of the worst accidents I’ve seen over the years have been caused by uninsured drivers. It is hard to have enough coverage when you get hit head on by a drunk driver, but you should do everything you can to make your uninsured motorists coverage as high as possible to do the best you can to protect your family. Most insurance carriers will allow you to have limits of up to $500,000 and some will actually allow you to add excess UIM coverage to your Umbrella policy. That means an extra $1,000,000 in coverage now extends to cover your medical bills if you are injured by an uninsured or underinsured driver.

We all want to save money and not overpay for our insurance but I hope that this article will help you understand the benefits of paying a little more for better protection.  Sure, you can buy insurance online in 15 minutes or less but, should you?

Talk to an independent agent – get the guidance you need for informed buying decisions.  We enjoy helping our clients do it every day!