Understanding The Different Types of Auto Insurance Coverage
No one likes to imagine a scenario in which they are catastrophically injured or they seriously harm someone else. Unfortunately, that’s what you must consider whenever you purchase new auto insurance coverage or you renew your policy. Otherwise, there might be dire consequences if you don’t purchase the correct type and amount of auto insurance coverage.
If you have any questions about the auto insurance coverage that you should purchase, you should contact an Atlanta car accident lawyer at Allen & Scofield Injury Lawyers, LLC. Although it might seem counterintuitive to speak with a car accident lawyer rather than an insurance agent when purchasing car insurance, there are some advantages to consulting a lawyer.
For instance, a car accident lawyer is typically in a better position to advise you about the common mistakes that people make when they purchase auto insurance coverage. An insurance agent sells policies, but the agent doesn’t adjust insurance claims, so he or she is not usually knowledgeable about the coverage pitfalls that people run into when, for example, they’re underinsured.
Car accident lawyers, by contrast, are in the business of litigating insurance claims. They handle insurance coverage disputes and underinsured clients all of the time. Although they cannot and will not disclose the identity of their former clients, auto accident attorneys can share many cautionary tales about clients that did not purchase enough auto insurance coverage to cover their losses because they thought it best to choose less coverage and save a few dollars on their monthly insurance premiums.
How Much Liability Insurance Coverage Should I Purchase?
Although Georgia law only requires drivers to carry $25,000 of liability insurance coverage per accident victim with a total of $50,000 liability insurance coverage per accident – no matter how many accident victims are injured – you should never purchase those minimum coverage limits.
If you injure someone and they have to undergo emergency room treatment, a mere emergency room visit can cost between $15,000 and $20,000 at many metro Atlanta hospitals. Even if the injured victim doesn’t go to the emergency room, but does do other follow-up medical treatment, the costs can still quickly eat up your liability insurance coverage. According to research performed by www.USAfacts.org, healthcare costs per person have risen over 225% since 1980.
If you don’t have sufficient auto liability insurance coverage to cover a victim’s injuries, the victim might choose to sue you to recover compensation from your personal assets. The victim might be able to garnish your wages. Or, file a lien against your home.
Here are a few rules of thumb when purchasing auto liability insurance coverage:
- If your total family household income is at least $40,000, you should purchase $50,000 of liability insurance coverage per person with a maximum of $100,000 liability insurance coverage per accident.
- If your total household income exceeds $75,000, you should purchase
$100,000 of liability insurance coverage per person with a maximum of $300,000 liability insurance coverage per accident.
- If your total household income exceeds $100,000, you should purchase
$250,000 of liability insurance coverage per person with a maximum of $500,000 liability insurance coverage per accident.
- If you own a home, you should purchase a $1 million dollar excess (a.k.a. “umbrella) policy that stacks on top of your auto liability insurance coverage.
You might think that those additional coverages will cost you tons of additional money. In reality, it usually won’t cost you more than $20-$50 per month. When you consider that that small additional investment may give you hundreds of thousands of dollars, or even a million dollars of liability insurance coverage, the decision to purchase additional coverage is a no-brainer.
Should I Purchase Uninsured or Underinsured Motorist Coverage?
You should absolutely purchase uninsured/underinsured motorist coverage. Specifically, you should choose “stacking” or “add-on” uninsured/underinsured motorist coverage.
If you purchased “stacking” or “add-on” coverage, the coverage that you purchased stacks on top of the at fault driver’s liability insurance coverage. So, if the at fault driver only purchased minimum coverage ($25,000), but you purchased $100,000 of stacking underinsured motorist coverage, you would have a total of $125,000 to compensate you for your losses.
If you didn’t purchase stacking coverage, the coverage on your policy is offset by the coverage on the at fault driver’s policy. So, if the at fault driver only purchased minimum coverage ($25,000), and you purchased $100,000 non-stacking underinsured motorist coverage, there would only be $100,000 coverage available to you.
$125,000 is much better than $100,000, right?
The difference is even starker if the at fault driver and you both only purchased minimum limit non-stacking coverage. In that scenario, the $25,000 of liability coverage from the at fault driver’s policy would offset the $25,000 non-stacking underinsured motorist coverage on your policy. You’d only have $25,000 available coverage, rather than $50,000 coverage. The value of many car accident victims’ cases falls in the range of $25,000 to $50,000, so the loss of that additional $25,000 coverage can make a huge difference.
What Other Types Of Auto Insurance Coverages should I purchase?
It is also a good idea to purchase medical payments coverage and rental car reimbursement coverage.
If you purchased rental car reimbursement coverage, your insurer will quickly provide you with a rental vehicle. They will also process your collision damage claim if you like. Typically, it takes less time to process a collision damage claim through your own insurance carrier than it does to process the claim through the at fault driver’s insurance carrier.
You should also purchase medical payments coverage on your insurance policy. If you did, you can submit your medical bills to your own insurer and request reimbursement for the bills up to the amount of coverage that you purchased. It typically takes less time to process those medical payment claims through your own insurance carrier than it does to process the claim through the at fault driver’s insurance carrier.
Allen & Scofield Injury Lawyers, LLC Can Help
If you or someone you love has been seriously injured in a car accident, you should hire a
an Atlanta car accident lawyer that knows how to find every possible source of insurance coverage that might compensate you for your injuries.
Even if you didn’t purchase enough insurance coverage, the at fault driver might have multiple source of liability insurance. Many times, insurance companies will not initially disclose whether the at fault driver has an “umbrella” or “excess” liability insurance policy. If he does, that could provide you an extra $1 million dollars of coverage. Other members of your household may have purchased uninsured/underinsured motorist coverage that can potentially cover you, as well.
The attorneys at Allen & Scofield Injury Lawyers, LLC
have over three decades of experience successfully litigating insurance claims. Call us today at (404) 419-6674, or reach out through our online form to schedule a free, initial evaluation of your case.