Make Sure you Have Enough and the Right Kind of Auto Insurance
A question car crash victims sometimes asks is, “how can I be stuck with all of these bills when the accident wasn’t my fault?” Or how can I only be given $15 thousand when I will never be able to work again? And the answer is, unfortunately, you had the wrong insurance.
Check Your Dec Page
Please, stop whatever you are doing right now. Get on your insurance company’s website, and check your declaration page. If you cannot find it online, call your insurance company and ask for a copy. The declaration page will explain what kind of insurance you have. Also ask for any waivers you might have signed. Those waivers will show you if you waived critical types of insurance that you should have but decided not to take.
Insurance Companies Only Pay What they Have To Pay
If you are injured due to a car crash which was not your fault, but the only insurance you have available is that purchased by the other driver, you could find yourself stuck with the ability to only recover very small amounts, even if you suffered a substantial injury with substantial medical bills. Even if you are never able to work again. Even if you are left with pain for the rest of your life.
What are the Minimums?
- In Pennsylvania, the minimum amount of insurance people have to buy for bodily damage is $15,000 per person and $30,000 per accident.
- In New Jersey, the minimum amount of insurance is the same as Pennsylvania, $15,000/$30,000 for bodily damage. New Jersey also has a special option called the basic policy, which drops coverage to $10,000.
How Does Payout Work?
You might wonder what the 15/30 means. What it means is that the insurance company is required to pay out a maximum of $15,000 per person and a maximum of $30,000 per accident. So, let’s say you are in a car with 4 people in it and someone else hits you. The maximum you can expect from the other person’s insurance is $7,500. This is because the maximum the insurance company can be required to pay for that one accident is $30,000. Let’s say there was a passenger in the other car. Now you are down to a maximum payment of $5,000 per person for your pain and suffering.
No Underinsured/Uninsured Motorist?
If you are in an accident and the other driver hasn’t got a lot of insurance and you have the right insurance, you may be able to go after your own policy. The same is true for drivers who hurt you but aren’t carrying insurance at all. You have an option called uninsured motorist to protect you from such people. That is unless you signed away (waived) underinsured/uninsured motorist.
Uninsured/Underinsured motorist coverage is quite inexpensive, but sometimes people don’t understand what it means, feel they are already paying enough for insurance, and sign it away. This is a huge mistake. Even if the other driver has the minimum amount of insurance and you have the minimum amount of insurance, you still have doubled the amount of money you can seek to cover your injuries. This can make a big difference in your life if you are stuck with medical bills that your health insurance won’t cover (assuming you have health insurance.) And of course if the other person is uninsured (as 1 in eight are) you won’t be able to recover anything at all for your injuries without uninsured motorist coverage . Never waive underinsured/uninsured motorist.
How much does it cost to add underinsured/uninsured motorist? In Pennsylvania, it averages less than $2-3 per month for each, or a total of $5-6 per month.
I Can Just Sue if there Isn’t Enough Insurance – Right?
You might be thinking, well, if the other person doesn’t have enough insurance, I can still sue. And you can. But ask yourself this question. If the person is only carrying $15,000 in insurance, how likely is it that they have assets? If you sue and win, but the person hasn’t got any assets, there won’t be anything for you to recover. So you will have gone through a lawsuit in the hopes that some day, in the distant future, that person may earn enough money that you can collect on the debt that they owe you. That won’t help you with your medical bills or inability to work right now. And chances are also good that the person will never have enough money for you to collect on the debt.
Did You Give Up Your Right to Sue?
Both Pennsylvania and New Jersey (along with many other states) have a policy which takes away your ability to sue unless you meet a certain threshold. In Pennsylvania this is called limited tort. In New Jersey it is called verbal threshold. In either case, to defeat this minimum, you have to prove that you suffered very serious injuries. So let’s say you miss work for a couple of weeks and have soft tissue damage which will last for a long time. You are unlikely to be able to meet the threshold and will have given up your right to sue. So you won’t even be able to go after that $15,000 from the other driver’s insurance.
Defeating Limited Tort/Verbal Threshold
You can bet that both your insurance company and the other driver’s insurance company will do everything they can to prevent you from being able to sue if you have a limited tort policy. Here is what is required to defeat the limit in Pennsylvania:
- A “serious injury” such as death, significant deformity or impairment of a body function. Serious pain and suffering in and of itself is not enough.
- You were a pedestrian or cyclist
- Occupant of a commercial vehicle
- Other driver was drunk or on drugs
- Other driver has no car insurance
- Vehicle from another state
New Jersey is very similar.
Don’t Get Limited Tort
If you can afford it, please avoid limited tort or verbal threshold. If you are in a relatively minor accident, but experience pain and suffering, miss a bit of work, with full tort, you will find that you can recover financially or sue if need be. And the amount you can recover will make it more than worth the cost of full tort insurance.
Protecting Your Assets
Another consideration when purchasing insurance is whether you have enough to protect your own assets. Let’s say you cause a car accident, but only have the minimum amount of insurance. On the other hand, you own your own house. You have spent your life paying off that house, earning savings and preparing for your retirement. The victim of that car accident can sue you for everything. You could lose everything. All because you didn’t buy enough insurance. Please, make certain you have enough insurance to cover your assets. And if you are a very successful person, such that you have more than the maximum amount of bodily damage insurance you can buy, you should consider an umbrella policy. Umbrella policies won’t help you if you are injured, but they will protect you from other people. For $1 million in insurance, these policies often start around $150 a year.
Need Some Guidance?
Hurt in a Crash?
If you were the victim of a car crash in Pennsylvania or New Jersey, feel free to reach out. We are here to help you get the right settlement. And if the insurance company won’t cooperate, we are ready, willing and able to take your case to court.