Various Insurance Coverages – Limiting the Loss

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I am reissuing this post from Sept., 2010 because I have again met a client who was injured by a driver with limited insurance. Yep; $20,000 in medical bills, and serious permanent injuries,  but the “tortfeasor” has just $20,000 per person total personal injury liability coverage!

My client has no “medical payments” coverage, no medical insurance of his own, and no “personal umbrella” to supplement his various basic coverages. What does this mean? Read on.

Auto Coverage:

1. Personal injury liability: minimum limits in WV $20,000 per person, $40,000 per occurrence. 2-4 days in the hospital will exhaust this, so I suggest at least $200,000 – $600,000. Your personal net worth also effects this since I assume you don’t want to file bankruptcy.

2. Property damage liability: Have you priced a “loaded” SUV lately? $50,000 – $200,000.

3. Medical Payments coverage, aka Family or Med Pay coverage: Companies are easing away from this coverage, but I suggest at least $25,000. This pays for your medical bills, ahead of your own medical insurance, even if you were at fault, and it protects your passengers and family.

4. Collision: this coverage allows you to fix your own car, even if liability is contested, or you were at fault. The “deductible” effects your premium. If you can have a fund set aside for the deductible, have as high a one as you can afford; at least $1000, and if you drive a clunker, consider whether you even need collision insurance. Makes no sense to have $1000 deductible on a $1000 car.

5. Uninsured Motorist coverage: “U.M.”; $20,000-$40,000 is mandatory in WV. This pays when the guy who hit you has no insurance! Remember, if you get minimum coverage, and are in I.C.U. for 10 days, this will pay for the first couple! Suggest $200,000 – $600,000.

6. Underinsured Motorist coverage:”U.I.M.” This kicks in if the guy who injures you does not have enough insurance. In WV, you get a minimum of $20,000-$40,000 unless your carrier can produce a written form (known as a Bias waiver from the famous WV Supreme Court case.)signed by you. You would be amazed how many waive this coverage, and the happy Progressive Insurance spokesperson, Flo, will be happy to have you “name your price” and ruin your life. It used to be that $20,000 of U.I.M.coverage was nothing because the insurance company deducted any liability coverage the other driver from your coverage amount. Our Supreme Court prohibited this, but it is still the law in VA! Again, I suggest $200,000 – $600,000. This is coverage you can assert as if the other guy carried that much liability insurance! Your company stands in his shoes instead of or in addition to his coverage.

7. Personal Umbrella: This is fascinating coverage, at least when you need it! Let’s say you have your house paid for, a few hundred thousand in your I.R.A., $50,000 or so in savings in investments, and vehicles worth $50,000 – $100,000. You have too much to go bankrupt, so maybe it is time for an “Umbrella”, for a rainy day, get it?? $1,000,000 in coverage is darn cheap, partly because your company will demand you get certain mininim coverages to assure that a claim against the umbrella is rare. THIS IS VERY IMPORTANT. BE SURE YOU HAVE IN WRITING THAT THE $1,OOO,OOO UMBRELLA INCLUDES YOUR UIM AND UM COVERAGES, OR YOU COULD BE HIT BY AN UNINSURED OR UNDERINSURED DRIVER AND LOSE YOUR HOUSE, BUSINESS, RETIREMENT, EVERYTHING. SOME UMBRELLA! This almost happened to some friends. Their agent talked them into an umbrella but failed to offer them the UM and UIM. Fortunately, WV law required them to do so, so the coverage was obtained. Don’t count on being so fortunate! Get the coverage IN WRITING.

Write me via “comments” below or to with any questions. If I don’t know the answer, I can always send you to Vince. jbh.

This post was written by Burton Hunter

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