As a personal injury lawyer with over twenty years of experience, the most important advice I give to friends, family, and clients often has more to do with insurance than it does with law. Much of what I do deals with the facts and circumstances of each individual case. Where, when, and how did the accident happen? How significant were the injuries? Who was at fault, and how do I prove that? How much insurance or assets may be available to satisfy a judgment if we prevail?
That last question may be the most important. An auto accident case, where the other party was clearly at fault and my client’s injuries are severe, is not worth pursuing if there is no money for my client to be had. Medical bills, lost wages, inconvenience, physical and emotional pain and suffering, scarring, disfigurement are often part of an automobile accident case. In Virginia, the only liability insurance a car owner is REQUIRED under law to carry on an automobile policy is twenty-five thousand dollars per injured person, up to fifty thousand dollars per accident. If the car is visiting Virginia and is registered in a different state, there may be even less coverage. Generally, twenty-five thousand dollars is not even enough to pay for just two days in the emergency room. When it comes to insurance in Virginia, generally we speak of five types. Liability coverage, collision coverage, comprehensive coverage, uninsured/underinsured coverage (a.k.a. “UIM”) and medical payments coverage, or “MedPay.”
Collision Insurance: fixing or replacing your vehicle regardless of fault.
Your own policy’s collision coverage, if you have it, will pay to repair or replace your vehicle regardless of who is at fault. If your car is “totaled” it will only pay up to and no more than the value of the car. Similarly, if someone else is at fault and “totals” your car, they or their insurance is only liable up to the value of your vehicle. This is regardless of what you owe to the bank. If you owe more on your car than the “kelly blue book” value of the car, the insurance company will send a check to the bank that has the lien for the value of the vehicle and you will still owe the bank the difference. It often happens that a person is in an accident that is someone else’s fault and ends up with a car payment and no car.
“GAP” insurance: to pay off your loan when you owe too much.
“Gap” insurance is insurance that will pay off your car loan if your car is “totaled” and you still owe money on your car loan. You will not get a replacement car, but at least you will not owe money for a car that you no longer have. Gap coverage is often required by, and offered through, the lender that financed your car. Do not get Gap coverage on your auto policy if you already have it through your lender.
Comprehensive: for non-collision related damage to your car.
Comprehensive insurance pays for damage to your car if your vehicle is damaged by something other than collision. Some people call this full coverage. If a tree falls on your parked car, and you have collision coverage but no comprehensive coverage, your insurance will not cover your car.
“UIM/UM”: to cover your damages when the other driver’s policy falls short.
But, what happens if someone else causes an accident and severely injures you and they have no insurance or minimum coverage? If you have MORE underinsured coverage than they have liability coverage, then your own coverage will help pay for the injury. It costs very little to increase your own UIM on your auto policy and if you are in an accident, you WILL likely need it. I recommend everyone have at least one hundred thousand dollars UIM coverage on their policy.
“MED PAY”: to help with medical bills.
Medical payments coverage or “MedPay” will provide medical bill reimbursement for medical bills associated with any injury to any person, including passengers, in your car regardless of fault. Even if you have medical insurance, MedPay will pay you directly for medical bills that your medical insurance has paid, giving you more immediate access to cash to cover other expenses until your accident claim is settled or resolved. MedPay coverage is usually purchased in increments of five thousand dollars.
Other coverage: for the odds and ends.
Your auto policy may offer many other types of coverage. After an accident, while your car is being fixed, you may need a rental car. There is coverage for that and it is inexpensive. Talk to your insurance professional about what you need. If you often have little or no reserve cash for emergencies, having coverage for incidentals will help you when you need it most.
For many people insurance is just another monthly bill, and it is, until you really need it, either because you caused or were the victim of an auto accident. You should sit down with your own insurance professional and discuss all of your insurance needs, and readdress those needs on a regular basis.
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