It’s a fact – collisions are the number one cause of death in the United States for people age 4 to 35. There are almost 20 million car collisions each year, so if you haven’t been involved in a collision yet, the odds are definitely stacking up against you.
By way of background, I am a personal injury attorney practicing in Seattle, Washington for over 17 years. I invented an online tool that helps people organize and settle their claim, as well as an injury claim calculator for the Better Business Bureau Video Series. I also wrote and co-produced a national DVD program for the Better Business Bureau (BBB) and American Automobile Association (AAA).
Most people don’t know their rights when it comes to car accidents. Even worse, many insurance companies have built their reputation trying to pay as little as possible to people who have been injured. To be sure, not all insurance companies are the same. But no insurance company hands out awards to adjusters for paying injured claimants more money.
Through these 6 articles, I am going to teach you how to get the compensation you deserve. We’ll start off with what you should know before the accident (i.e. your insurance coverage), then later articles will tackle what you should know during and after a collision.
What insurance coverage do I have?
It’s critical to know what your own insurance policy covers now, before you’ve been in a collision. Most people don’t even read their own auto policy until they’ve been in an accident. By then, it may be too late. Pull out your own insurance policy now and follow along while I explain the most common coverage options.
Liability, the basic coverage required by many states, provides you with protection against property or bodily injury damage you cause.
Coverage is generally provided not only for you, but also for family members who live in your household. People who drive your car with your permission may also be covered.
Typically, you’re also protected when you use a vehicle you don’t own (for example, if you borrow a friend’s car).
This part is very important. Your insurance policy has a dollar limit, known as your “policy limits.” For example, Washington State has minimum liability requirements of $25,000; however, depending on your assets, you may want to consider purchasing more protection. Policy limits work like this – if, for example, your limits are $25,000, and you cause $75,000 worth of damage, your carrier will pay the first $25,000 of damages and you will be personally responsible for the additional $50,000. This is why it’s critical to have insurance policy limits that you’re comfortable with.
These are general guidelines. Make sure to read your entire policy for any exclusions or situations that your policy does not cover.
B. Uninsured Motorist
What happens when you are involved in an automobile collision with a driver who is at-fault but does not have auto insurance? In those circumstances, you would look to your Uninsured Motorist, or U.M., coverage.
Closely related to UM is another form of coverage called Under-Insured Motorist, or UIM. This type of coverage applies in situations when you are involved in a collision with an under-insured driver. You will typically collect the insurance coverage the at-fault driver has and then you will make a claim against your own UIM coverage. For example, if the other driver’s policy limits are $25,000, and your damages are $100,000, the UIM coverage on your own policy would pay the additional $75,000, depending on your UIM policy limits.
UM and UIM typically apply only to bodily injury claims.
While many states require insurance companies to offer UIM coverage, you may not be required to purchase it.
Collision coverage pays for the damage to your vehicle when you’re involved in a collision with another vehicle or object.
Collision coverage is not mandatory. You may choose to purchase this coverage depending on the value of your vehicle. The collision portion of your policy will typically include a deductible. That’s the portion you are responsible for in the event of a loss.
D. Comprehensive/ Non-collision
Comprehensive covers those damages to your vehicle that are non-collision related, such as fire, wind, hail, vandalism, or theft. Typically, a deductible applies to this coverage.
Another item to look for in your policy in the event of an accident is towing coverage. Immediately after the collision, your car may not be drivable – or you may be injured. If you purchased towing coverage and your vehicle needs to be towed, your insurance company will pay, usually up to a limit of $50 – $75.
If you have Rental Reimbursement Coverage, your insurer will provide payment for a rental car while your vehicle is being repaired. You should expect to rent a comparable vehicle to your own. There is usually a daily limit and a maximum total rental expense. For example $30 per day and $900 per incident.
G. Personal Injury Protection (PIP)
A very important part of your insurance policy deals with medical coverage. After a collision, there may be an immediate need for medical payments. You need to understand what coverage you have – before a collision occurs.
1. If You Have PIP
Your insurance company is required to offer Personal Injury Protection or “PIP” and must obtain your written refusal if you decide not to purchase it. “PIP” benefits include payments to you, your family, or your passengers for medical bills, lost wages, and home nursing care. Your PIP coverage may also provide protection when you are riding in someone else’s car or even when you are injured as a pedestrian.
In order for PIP to apply, the medical treatment must be related to injuries caused by the collision and the treatment must be reasonable, necessary, and provided by a licensed practitioner.
You should not hesitate to utilize your PIP coverage if you need treatment. However, if you receive compensation for your injuries from the person that caused the collision, you may need to reimburse your carrier for their PIP expenses.
In many states, however, there is a “made whole” rule. That means if you are not made whole by your recovery (e.g. you collect the insurance policy limits), you may not have to reimburse your insurance company or health insurance carrier for the medical payments they have made on your behalf.
2. If You Do Not Have PIP:
If you do not have PIP coverage, look for payment of your medical bills from your own health insurance. The same principle of reimbursement applies if you are able to recover compensation from the at-fault party. Many states have the “made whole” rule discussed above.
If you do not have health insurance, you may be able to locate a provider to treat you on a “lien basis.” This means the provider will not require payment for services until you are able to recover compensation for your injuries. Remember, you will owe the provider even if you never recover any compensation.
While it is possible to ask the other party’s carrier to pay for your treatment, it would be unusual and may only occur if it is absolutely clear their insured is completely responsible for the collision.
If the other party’s carrier does agree to pay for your treatment, they may require that you provide a recorded statement describing the collision and your injuries.
This is extremely important: You should not provide a statement without first consulting with an attorney. You are welcome to email or call me – there is no charge.
H. Umbrella Policies
An umbrella policy is sometimes referred to as an “excess” or “catastrophic” policy. It is an additional layer of liability protection on top of your regular insurance.
For example, if you have auto insurance liability limits of $100,000, you may be able to purchase an umbrella policy that will cover you for an additional $1 million of liability protection. In order to purchase an umbrella policy, most insurance companies require at least $100,000 in underlying limits – and some require even more.
An umbrella policy would not only cover car collisions, but also other instances where you have become liable. Umbrella policies generally provide coverage after your primary insurance has been exhausted. Be sure to check your umbrella policy for exclusions.
If you’re in a serious accident, it is often necessary to sue the other driver and perform discovery (written questions the other side answers under oath) to find out if they have an umbrella policy. Most insurance companies will not voluntarily disclose their insured’s limits or whether there is an umbrella policy. I have had a number of cases where we later discovered (and recovered) the umbrella policy for our clients.
I. Policy Limits
You can sometimes obtain much higher protection on your automobile policy for a relatively small increase in premium cost. You should definitely consider increasing your limits if you have assets to protect – here’s why:
If you cause an accident, you never know what a jury may award the person you injured. With low liability limits, a jury could easily give an award that exceeds your limits – leaving your assets vulnerable to collection. I’ve personally had experience with collecting money from people over their insurance limits. This is not a pleasant experience for the person who has to pay out of their own pocket – most of the time because they didn’t realize they purchased the minimum insurance limits required by law.
The other reason you may consider increasing your limits is to make settlement attractive to the injured party. If you have seriously injured someone and your limits are $300,000, the injured person (and their lawyer) may be willing to take this amount to settle the entire case. A very important secret for you to know: your insurance company cannot pay the injured person the $300,000 unless the injured person agrees the case is over and completely releases you forever! Therefore, having high limits could be enough incentive to get you out of a very large potential judgment – even one in excess of your policy limits.
On the flip-side, if you’ve been seriously injured you want to find out what the other side’s policy limits are. If the limits are low enough, you may be able to make a “policy limits demand” to their insurance company. If the policy limits are offered to you and you accept, you will collect the insurance money and must release the other driver. Again, feel free to contact me before you make or accept a policy limits demand.
Talk to a qualified attorney for free: If you get in an accident, you should speak to a qualified attorney. It’s almost always free. There’s many reasons you should do this (see my article entitled: Top 10 Reasons To Make A Free Call To An Attorney First). The key is to make sure the attorney is qualified.
If you like, you may call me or email me and I’d be glad to help you find the top attorney in your area. The best way to email me is to get your claim value by filling out the 10 questions in the free Claim Calculator link below. That will give me both your email address and specific information about your case (amount of property damage, medical bills, wage loss, etc.) I’m able to find, through trial lawyer association list-serves and other means, the top attorneys in every area of the United States. I communicate directly with the attorney about your case particulars, and if he’s willing to meet with you, I connect you with the attorney so you can schedule a time to meet or speak about your case.