Whether it’s the LiMu Emu or Flo, everyone has a (least) favorite car insurance commercial that they love to hate. But how familiar are you with the products they are selling? Here are the three types of coverage everyone should carry on their cars:
Bodily Injury Liability Insurance:
Bodily injury liability insurance is the basic coverage that every driver on the road must carry by law. Your bodily injury liability insurance protects other drivers on the road from your own negligence. Each state regulates the minimum amount of bodily injury liability insurance that drivers must carry to be legal on the road. Colorado’s state minimum is $25,000.00 per individual and $50,000 per incident.
The bodily injury policy limit is the ceiling for how much you own car insurance company will pay to another driver should you cause a wreck. When deciding how much bodily injury insurance to purchase, you should think about your own assets (your house, cars, savings, etc.) and decide how much of that you want to protect. If you cause a wreck, you are personally responsible for all the damages suffered by the other person. Purchasing more than the state-mandated minimum bodily injury liability insurance reduces your personal liability exposure after a wreck.
If you do not carry at least the state mandated minimum bodily injury liability coverage, not only would you be personally responsible to pay the damages caused to an injured person, but you could lose your driver’s license.
Underinsured or Uninsured Motorist Insurance:
Underinsured/Uninsured Motorist Insurance is optional insurance coverage that you should purchase to protect yourself and your family in case you are hit and injured by a driver who either does not carry any bodily injury liability insurance or whose bodily injury liability limits are insufficient to compensate you for your injuries. In the case that you are hit by an underinsured motorist, your own insurance company will step in to pay for your damages above and beyond the at-fault driver’s insurance, up to your own policy limit. In Colorado, car insurers must offer you underinsured/uninsured motorist coverage and will ask you to sign a rejection form if you elect not to purchase this coverage.
A good rule of thumb is to purchase at least as much underinsured/uninsured motorist coverage as you do bodily injury liability insurance. That way you are protecting yourself as much as you are protecting the other drivers on the road. Carrying more underinsured/uninsured motorist coverage will give you piece of mind that no matter what coverage another driver has, you and your family will be protected in the case of a catastrophic crash.
If you do not have underinsured/uninsured motorist coverage on your policy, you are at the mercy of the at-fault driver’s bodily injury liability insurance to pay your medical bills and other damages. While in Colorado, you can usually count on the other driver to have at least the state minimum of $25,000.00. That may seem like plenty, until you consider that an ambulance ride and a visit to the emergency room can cost upwards of $10,000! If you or your family member needs more acute or specialized treatment, the at-fault driver’s insurance can be exhausted very quickly. Without underinsured/uninsured motorist coverage, you could be left to pay the rest of the medical bills out of your own pocket.
Medical Payments Coverage:
Medical payments coverage is another optional insurance coverage that you should purchase that will pay or reimburse car-crash-related medical expenses regardless of who was at fault for the crash. After a car crash, you can submit related medical expenses to your insurance who will reimburse you for expenses that you paid. Sometimes, you can even give your medical payments insurance information to your medical providers and the provider will bill your medical payments coverage directly, saving you from paying out of pocket. While the at-fault driver is ultimately responsible to pay for the damages they have caused, medical payments coverage is an excellent stopgap to help you pay for the medical treatment you need while you wait for a settlement.
Most car insurers will offer $5,000, $10,000, and even sometimes $25,000 medical payments policies. While $5,000 is the most basic, and always the cheapest, you might consider purchasing higher policy limits if you are worried about paying for unexpected medical bills after a crash.
If you don’t have medical payments coverage on your insurance policy, you will have to pay your car-crash-related medical bills out of pocket.
Remember: “Full Coverage” is an industry buzzword that does not guarantee you carry these three types of policies! Rather than take your agent’s word that you are “in good hands”, carefully review your car insurance policy to make sure that you have to protection you and your family need.
What to do if you or a loved one is involved in a car crash:
- Seek medical attention immediately
- Open an insurance claim right away with the at-fault drivers’ insurance company and be sure to also alert your own insurance carrier of your claim.
- Call Foster Graham Milstein and Calisher, LLP for a free case consultation