Collision and comprehensive coverage auto, medical payments coverage auto insurance, personal injury liability auto insurance, property damage liability auto insurance, Uninsured Motorists Coverage Auto Insurance
By Gregory Haubrich
Attorney at Law
When I ask my clients what their auto insurances coverages are they often tell me they have “full coverage”. I ask to see their declarations pages, which show what their coverages are and what their premiums are. They ask me why I am interested in their insurance when it was that other guy’s fault. They worry that I’m going to make a claim against their insurance that will raise their rates. Once I look at their declarations sheets I find all-too-often they don’t have useful or well chosen coverage at all.
So, here is a primer on the basic types of coverage you can get, and what they do for you.
Let me start right here with a recommendation: buy UM coverage, and get as much of it as you can get. It is the most important, cost-effective, and useful type of insurance you can have if you get hurt in a wreck.
1. Liability: personal injury and property damage
Oklahoma law requires every driver to have $25,000.00 per person/$50,000.00 per “accident”, in personal injury and property damage liability coverage. Liability coverage provides indemnity and legal defense if someone makes a claim against you for injury or property damage due to the operation of your vehicle.
“Indemnity” means that your insurer will investigate and assess the claim, defend the claim if you are sued, and pay the claim to the injured person up to the limits of the coverage.
Your insurer has a duty to you to pay the claim fairly, but to deny it if you are not at fault. The insurer also should settle the claim within the policy limits if possible, so you do not get exposed to an “excess judgment” where the person making the claim can collect not only your insurance, but your personal assets. The company will provide you a lawyer and the costs of defense, and these are not counted against the limits of your coverage.
I always recommend carrying higher than the minimum limits, like $100,000.00 per person/$300,000.00 per accident, to protect yourself against serious liability. Higher increments of liability insurance are quite inexpensive, and give you valuable protection.
Despite what the law requires, I read recently that the Oklahoma Department of Public Safety calculates that about 30% of Oklahoma drivers are completely uninsured, which is one of the reasons you really want to have UM coverage.
2. Collision and Comprehensive
Collision and comprehensive coverages go together. When people say they have “full coverage” they usually mean minimum-limits liability, plus collision and comprehensive. Collision coverage will pay cost of repair of your vehicle, less your deductible, no matter who was at fault. Comprehensive coverage insures against losses such as vandalism, theft, flood, hail, and similar losses to your vehicle or property you have inside of it. You are required to have collision and comprehensive insurance by lenders, to give them protection against damage and loss of value to your car which is their collateral.
Medical payments coverage pays your medical expenses, up to the limits of coverage, regardless of who was at fault in a wreck. Med-pay coverage is very cost-efficient. If you have $10,000.00 in med-pay you will have access to medical care and treatment even if you don’t have health insurance, a lawyer, or a nice forgiving doctor who doesn’t care about money. Medical payments coverage is virtually automatic so long as the injury is caused by and related to a collision; therefore, although we help you process the claim, we usually do not take a fee from either property damage or medical payment compensation to our clients.
This is “uninsured/underinsured motorist” coverage. Remember I mentioned nearly a third of Oklahomans are uninsured? Suppose one of those runs a red light and broadsides you. Your spine is sub-luxed (misaligned), your left shoulder doesn’t work right, and you have fierce headaches and possibly a closed-head injury from banging your head against the glass on the driver’s door.
But hey presto! Some smart lawyer or insurance agent advised you (and you listened) to buy $100,000.00 per person/$300,000.00 per accident UM coverage. Now, instead of having an injury and virtually no chance of ever receiving compensation, you have sufficient coverage to help you out.
Your UM coverage goes with you wherever you go. It goes with the person, not the vehicle. If I am riding with you, and you run us into a train (please don’t), in addition to collecting on your liability insurance I can go above that to collect on my underinsured motorist coverage. You don’t even have to be in a vehicle. If you are walking across the street and get hit by a drunk driver; or if you are sitting on your porch and an out-of-control vehicle screeches onto your lawn and creams you while you sip a mint julep, you are covered because the loss arose from operation of a motor vehicle. In addition, any resident family members who don’t own their own cars, and any passengers in your covered vehicle, are entitled to recover under your UM policy.
Here’s where my clients stop me and say they don’t want to sue or make a claim against their own insurance company, because it “wasn’t their fault” and we don’t want our insurance rates raised. But first, an insurer is forbidden by state law from targeting you for a rate increase for having a claim which was not your fault. And second, that is precisely what you have been paying those premiums for: to be able to be compensated for the wrong of another driver if the driver does not have sufficient liability insurance for the injury you have. Weep not for the insurers; I promise most of them have enough money to buy more banks than you and me and Wells Fargo all put together.
a. 100/300 liability
b. collision and comprehensive only if your vehicle or the things you carry in it are worth it or you are required to by a lender
c. 10,000 medical payments coverage
d. 100/300 UM
A final pointer: sometimes you can pay for the med-pay and UM by increasing the deductible on your collision and comprehensive insurance from, for instance, $500.00 to $1000.00. When you think about it, it doesn’t make sense to prioritize coverage for your vehicle over coverage for your health.
Which reminds me of a lawyer joke.
A young hotshot lawyer collected a big fee and immediately went out and bought a brand new yellow Porsche Boxster. He was so proud. The next morning he parked it in front of his law office where everybody could see it. About the time he opened the door to get out of the car a UPS truck came along and took off the door of his brand new sports car.
The lawyer was hopping mad. He was screaming to the investigating officer to arrest the UPS driver: “I just bought that car!. That car is my baby! It will never be the same again! He just swerved into it and destroyed it!”
The officer looked at the agitated young lawyer and said: “Sir, I think you need to calm down. Here you are all excited about the damage to your new car, and your left arm has just been traumatically amputated at the shoulder.”
The lawyer looked down at the bloody stump of his shoulder and said: “My arm? OHMYGOD!!! MY ROLEX!!!”
Hee hee. We’re not all quite that materialistic, I promise.