Auto Insurance Evaluation

As summer approaches, many of you will be making vacation and other travel plans. Whether you are driving to visit family, headed south to Florida, or sticking around Atlanta for a “stay-cation,” I’d like to suggest that you take a look at your current automobile insurance coverage. As the economy continues to suffer, we have seen more and more individuals and families trying to save money by scaling back their auto coverage. For that reason, I encourage each of you to protect yourself and your families by maintaining, and even increasing, your coverage in two key areas.

The first is Uninsured motorist (UM) coverage which provides coverage to you and the passengers in your vehicle in the event they are injured in an accident and the responsible party does not have insurance coverage, or sufficient coverage, to pay the claim. In addition, UM coverage provides coverage to you and your family in the event you are injured while in someone else’s vehicle.

As you review your insurance coverage and consider the possibility of changing your existing UM coverage, it is important to consider the two types currently available. The first is typically referred to as “set-off” or “reduced” UM. Simply put, your available UM coverage is reduced by the amount of liability coverage, if any, carried by the at-fault driver. For example, assume you chose $100,000 of “reduced” UM coverage and are injured in an auto accident by an individual carrying the state minimum liability limits of $25,000. In that case, the insurance coverage available to you would be $25,000 from the at-fault driver’s policy and $75,000 from your own UM coverage. This is in stark contrast to the second form of UM coverage available, known as “add-on” or “excess” UM. With this type of UM coverage, your coverage limits are in addition to the available liability limits of the at-fault party. Therefore, in the above example if you opted for $100,000 of “add-on” UM coverage, the insurance coverage available to you would be $25,000 from the at-fault driver’s policy as well as $100,000 from your own UM coverage for a total of $125,000.

In my experience, the difference in the premiums for “reduced” UM versus “add-on” UM coverage is minimal and well worth the additional expense. At the very least, I urge you to consider some form of UM coverage if you do not already have it. If you’ve already acquired UM coverage, I encourage you to increase its limits to as much as you are comfortable and to be sure to select “add-on” coverage as opposed to “reduced” or “set-off.”

In addition to UM coverage, medical payments coverage (also known as Medpay) is another highly affordable and important coverage to consider. In a time when more and more individuals are without health insurance, Medpay coverage has become much more important. Medpay coverage affords those insured under the policy with coverage to pay for medical bills incurred as a result of injuries sustained while in a covered vehicle. For example, if you or a family member is injured in an auto accident and you don’t have health insurance, Medpay can be used to pay for hospital bills, doctor’s visits, and physical therapy up to the limits of your coverage. In the event you do have health insurance, Medpay can be used to reimburse you for co-pays, prescriptions, and other out-of-pocket expenses.

Medpay is one of the most affordable and useful additions one can make to their auto policy, however it may not be an effective choice for everyone. Individuals covered by health insurance with a high deductible or who have no health insurance will benefit the most from Medpay. In contrast, individuals who expect to have little out-of-pocket expenses as a result of a low-deductible health care plan will likely find that money better spent increasing the limits of their UM coverage.

Whether you are renewing your policy, shopping for a new insurance company, or simply trying to keep your auto policy as effective and affordable as possible, I hope you will consider adding or adjusting your UM and Medpay coverages. Oftentimes, dropping unnecessary features like roadside assistance or rental car coverage will more than cover the additional premiums for these two highly useful products. Should you have any questions regarding the coverages discussed above, or would like me to review your current policy, please do not hesitate to contact me and I will be happy to help you.

As always, my business relies heavily on referrals from friends and clients, past and present. Over the past 17 years I have helped hundreds of individuals and families recover for all sorts of injury-related matters including truck wrecks, car wrecks, dog bites, slip/trip and falls, and other situations where someone has been injured due to the fault of another. If you or someone you know is injured, please call or refer them to my personal injury law firm for an assessment of the potential claim.

Have a safe and memorable summer!