The most common phrase I hear when meeting a new client who was injured in an automobile collision is “full coverage”. Most of my client’s proudly proclaim that they have “full coverage”, but in most instances, they do not have the proper coverage or enough coverage to cover their loss.
The term “full coverage” can be misleading and could be interpreted to mean that they have sufficient coverage in each category of loss. To understand how most people are under insured, it is necessary to understand the applicability of the coverage and how it protects/affects you in an automobile accident.
These coverages are:
- PERSONAL INJURY PROTECTION — Otherwise known as “PIP,” this is medical coverage for you or other persons covered under your policy who suffer injuries in an auto accident. It is sometimes called “no-fault” coverage because it pays your own medical expenses no matter who caused the auto accident.
- LIABILITY — This coverage pays others for damages from an auto accident that you cause. It also pays for a lawyer to defend you if you are sued for damages that you cause.
- BODILY INJURY LIABILITY COVERAGE — Pays for claims and lawsuits filed against you by people who are injured or die as a result of an auto accident you cause.
- PROPERTY DAMAGE LIABILITY COVERAGE — Pays for claims and lawsuits filed against you by people whose property is damaged as a result of an auto accident you cause.
- UNINSURED MOTORIST COVERAGE — Pays you for property damage or bodily injury if you are in an auto accident caused by an uninsured motorist.
- UNDERINSURED MOTORIST COVERAGE — Pays you for property damage or bodily injury if you are in an auto accident caused by a driver who is insured, but who has less coverage than your underinsured motorist coverage.
- COLLISION COVERAGE — Pays for damage to your vehicle as the result of a collision with another car or other object.
- COMPREHENSIVE COVERAGE — Pays for damage to your vehicle that is not a result of a collision, such as theft of your car, vandalism, flooding, fire or a broken windshield. It also pays if you collide with an animal.
The minimum legal limits in the State of New Jersey have been the same for my entire 25 years as a lawyer. What may have been plenty of coverage in 1985 is hardly sufficient today.
We recommend that you review your policy to make sure that you have sufficient coverage to make up for any losses you may suffer or cause. Purchase as much coverage as you can afford to make sure your assets are protected, as well as coverage against other drivers that have insurance coverage too low to adequately compensate you should you become injured and are unable to work.
Start at $100,000/$300,000 for Bodily Injury and Property Damage and make sure that those same limits are reflected on your Uninsured/Underinsured Motorist Coverage. Be sure that the PIP limits are $250,000 with the mandatory minimum of $250.00 deductible and 20% co-pay and that your wage loss limits will adequately compensate you if you are out of work as a result of an automobile accident. Do some comparison shopping to find out the cost of the next higher limit. It may be less then you think. If you have some savings, own a home or have other assets, look into an umbrella policy for additional liability coverage. A million dollar umbrella policy really is affordable.
Do not put it off – review your insurance coverage today.