For most people, auto insurance is nothing more than annoying annual bill that they are required by law to have and they assume that if they have "full coverage" they won't have to worry about everything being taken care if they are ever in a collision. Unfortunately, auto insurance is a more complicated than that. Many injured victims of auto collisions are surprised to learn that their "full coverage" does not include everything they need to ensure that they are fully compensated.
The first place to start with ensuring that you have the right auto insurance coverage for your needs is to speak with a reputable and experienced insurance agent. While the ease of purchasing your auto insurance coverage through widely available do-it-yourself websites is appealing, it is not designed to properly inform or advise consumers of what coverages are available, what different coverages will pay for if you are involved in a collision, or what coverages and limits are right for your specific situation and needs. A professional insurance agent will ask questions, understand the nuances of your situation and needs, and be available to make changes to your insurance policy anytime the need arises, among many other services they provide.
UNDERSTANDING YOUR AUTO INSURANCE
In Washington State, drivers are required by law to carry a minimum of $10,000 of property damage liability and $25,000/$50,000 bodily injury liability coverage.
Property damage liability coverage pays for damages that you cause to another person's vehicle or personal property.
Bodily injury liability coverage covers injuries that you cause to another person. The limits of liability on your policy are usually listed in the following format: $25,000/$50,000. This means that your policy will provide coverage up to $25,000 for injuries to one person, and up to $50,000 for injuries to two or more injured persons, but in no event more than $25,000 for any one injured person.
These minimal limits do not go far with the expense of vehicle repairs and medical bills. If you don't have enough insurance coverage to fully compensate a victim to which you are liable for either property damage or injuries, you can be personally liable for any excess costs.
WHAT IS "FULL COVERAGE"?
"Full coverage" is a term often used when discussing personal auto insurance. "Full coverage" simply means that an insured has purchased collision and comprehensive coverage in addition to the liability limits required by law. However, "full coverage" does not include every possible type of coverage available to purchase.
Coverages not part of "full coverage" include:
1. Uninsured/Underinsured Motorist (UM/UIM) Coverage
2. Personal Injury Protection (PIP) Coverage
3. Loss of Use (or Rental Car) Coverage
OTHER AVAILABLE COVERAGES
Collision coverage pays for damages to your covered auto resulting from a collision with another vehicle or object. Comprehensive coverage, on the other hand, pays for damages to your covered auto caused by an incident that does not qualify as a collision such as theft, vandalism, glass and windshield damage, weather, and accidents with animals.
Uninsured and underinsured motorist (UM/UIM) coverage applies when you have been injured, or your property has been damaged, by a driver who either (1) did not have any personal auto insurance, or (2) did not have enough property damage and/or bodily injury liability coverage to fully compensate you for your injuries and/or damages.
Personal injury protection (PIP) coverage pays for medical treatment that is reasonable, necessary, related to the accident, and incurred within 3 years of the collision. In addition to medical treatment, PIP coverage will pay for funeral expenses, wage loss and loss of services. PIP coverage is a "no-fault coverage" meaning regardless of who is at-fault for your injuries, your insurance company will pay PIP benefits under your policy.
Loss of use coverage, commonly known as rental car coverage, will pay for the cost of a replacement vehicle while your vehicle is unusable due to covered loss such as a collision. It does not pay for a replacement vehicle while your covered auto is unusable due to regular maintenance, wear and tear, or breakdown.
WHY DO I NEED MORE THAN LIABILITY COVERAGE?
What would you do if you were catastrophically injured as a result of another's negligence and they either had no insurance or they only had minimal insurance limits? Would you be able to afford to pay for your medical care, deductibles, co-pays, lost wages, long-term care, etc. out of pocket? For most of this, the answer is "no."
Carrying coverages such as UM/UIM and PIP, help off-set these costs when the at-fault driver does not have sufficient coverage to fully compensate you for your damages and/or injuries.
While a good injury lawyer will find every available coverage to compensate you for your loss, they cannot create coverage where none exists. Appropriate auto insurance coverages must be purchased as part of your policy before the need arises for it. After you have suffered a loss, it is too late to add the coverages needed to obtain full compensation.
As discussed above, when in doubt about what coverages are right for your specific situation and needs, speak with a reputable insurance agent. They will be able to guide you and help safeguard your future.