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Spring Cleaning Your Auto Insurance Policy: Are You Adequately Covered?

May 17, 2017

By Douglas Wayne

Automobile insurance is a necessary evil.   No one likes paying for a product like auto insurance that no one wants to ever have to use.   However, the only thing worse than paying for unused automobile insurance is discovering, after an accident, that the automobile insurance you have been paying for is not adequate to help make you whole for your losses.   Spring is an excellent time to take out your automobile insurance and look at your present coverage selections.  Some upgrades may be in order.

The issue of full verses limited tort insurance was covered by this author in a previous blog entry titled Saving 15% Could Cost you a Whole Lot More – Full Tort v. Limited Tort Automobile Insurance. Suffice to say that this author believes that limited tort insurance is a poor value that saves the buyer a little money now in exchange for an inferior insurance product that likely provides insufficient protection to you and your family in the event of an auto accident.  If you do one thing to improve the quality of your automobile insurance protection, upgrading from limited tort to full tort insurance should probably be it.

Consider raising your liability limit.  While you can legally drive with only $15,000.00 in liability coverage, this low level of coverage is woefully outdated.   Nearly every car on the road today will cost more than $15,000.00 to replace.   If you slide on a wet road and impact several cars, the property damage alone could easily exceed the legal insurance minimum.   Moreover, if that wet road accident involves bodily injury to one or more persons, your potential liability can skyrocket.   While some plaintiffs will accept the limits of your insurance as full settlement, a bad injury combined with an aggressive plaintiffs’ lawyer could result in loss of assets including but not limited to the equity in your home and your bank accounts and savings.   As your assets grow, so does your need for adequate auto insurance liability limits.   As your assets increase, so does your need to make sure that your automobile insurance is adequate to protect those assets.

Consider increasing  your uninsurance and underinsurance coverage, or adding these to your insurance if you are not currently carrying them.  Uninsured and underinsured automobile insurance is  separate and distinct from liability coverage.  Liability coverage is for damages sustained by others, and cannot be used to compensate you.  The drive that hit you may be driving illegally without insurance coverage (an uninsured driver), or may only carry the legal minimum of $15,000.00 in coverage that might not be enough to compensate you for your personal injuries and/or property damage (an underinsured driver).  The at-fault driver may have additional personal assets to cover your losses, but most likely will not.

The way to protect yourself and your family from damages caused by uninsured and underinsured drivers is by carrying adequate uninsured and underinsured coverage.   This is coverage that you pay for that allows you to make a claim against your own policy of insurance if you can collect nothing against an uninsured driver or less than your full damages against an underinsured driver.  This coverage is relatively inexpensive as compared to liability coverage and can be a very worthwhile investment of your insurance premium dollars.   Please note that uninsurance and underinsurance coverage are separate things and are not interchangeable; uninsurance coverage does not apply to the underinsured situation, and visa-versa.  You need both underinsured and uninsured coverage.  It is recommended that your underinsurance and uninsurance coverages each at least equal the dollar amount of your liability coverage.   In this manner, you protect yourself and your family at least as well as you protect other drivers and the public.

Stacking insurance is a good way to increase your coverage for relatively little extra investment.  “Stacking” allows an insured to combine individual uninsurance or underinsurance benefits either within one insurance policy or across two or more separate policies for your household vehicles.   For example, if you have three cars in your household, each with uninsurance coverage of $50,000.00, you can arrange to “stack” this coverage and have a total uninsurance coverage on each car of $150,000.00.   This allows you to arrange for multiples of uninsurance and/or underinsurance coverage at a fraction of the price of buying higher limits on your coverage.   If you have multiple cars, stacking can be a way to get substantial additional coverage for a relatively small investment in additional premiums.

While checking your insurance, make sure that you are up to date on your address, the types of driving that you do, and on all eligible drivers in your household.  Failure to keep your insurance company up to date on these types of changes can jeopardize your claim and can even lead to a denial of coverage following an accident.

Is your car getting older?   You may want to consider reducing the amount of coverage for property damage to your older vehicle.   Auto accident repairs to an older car can easily exceed the value of the vehicle.   If the repairs would cost more than the value of the vehicle, the insurance company can simply declare the car to be totaled.    At some point, you might wish to consider reducing or dropping collision coverage on an older car and banking the savings toward the eventual replacement of the car.

The coverage provided by an automobile insurance policy is set forth on what is called the declarations page.   This declarations page breaks down the various coverage options you currently have selected and the cost for each option.   The reader is advised to review their declaration pages and make sure that they understand their coverages.    After an accident is a terrible time to discover that your insurance coverage is lacking.   If you have questions about your individual auto coverage or whether it is adequate and cost-effective in the manner in which it serves to protect you and your family, please contact your insurance agent or a High Swartz attorney to discuss your unique situation and needs.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

About the Author: Douglas Wayne

Douglas Wayne joined High Swartz in 2016 as the result of a merger with McNamara, Bolla & Panzer Attorneys at Law where he put his deep background in workers’ compensation matters to good use. He has practiced law in Bucks County, Pennsylvania, since 1995 after working as a litigation associate in Philadelphia for several years. Doug is also an experienced personal injury and Social Security Disability attorney and is highly sought after for his skills in the area of employment law.

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