The must haves:
In Connecticut there are three mandatory coverages: property damage, liability, and uninsured/underinsured motorist coverage. I will be writing a second blog post (Part 2) addressing the optional coverages at a later date.
1. Property damage. This covers the damage you do to someone else’s property. If you hit another car, a building, a guard rail, a light post, etc. this is the portion of your insurance coverage that will cover that. This does not cover damage to your own property, like your vehicle. That is covered by collision, which I will discuss in Part 2 of this Blog.
2. Liability. This protects you if you cause a collision and hurt someone. This also protects you if you allow someone else to drive your car, and they cause a collision and hurt someone. In Connecticut, the minimum coverage legally allowed is $25,000/$50,000.00. That means the most the responsible party’s insurance would pay to a single individual is $25,000.00 regardless of how hurt they are. The injured person could have $100,000.00 in medical bills. It doesn’t matter. The insurance company is capped at paying that person $25,000.00. The $50,000.00 is how much money the insurance will pay per incident. You could hit a clown car packed to the brim with 12 clowns, all claiming to be hurt. The most the insurance company would pay out is $50,000.00, divided among 12 clowns.
Many people opt for this minimum coverage because it is the cheapest. But your thought process should not stop there. The purpose of insurance is to protect. So think about what it is you need to protect. Do you own a home? Do you have a job? Do you have a savings? Just because your insurance is capped at paying $25,000.00 does not mean that is all the injured person can collect. An injured party may accept the money from your insurance, and then go after you personally. The injured party could get a judgement against you, and you could be forced to come up with money out of your own pocket. The injured party could get a judgement against you, and if you are a homeowner, put a lien on your home. You do not want to be in this situation.
3. Uninsured/underinsured motorist coverage. Uninsured motorist coverage protects you, when you are hit by a driver who does not have insurance. You can recover from your own insurance company. Underinsured motorist coverage protects you, when you are hit by a driver who does not have enough insurance.
• Uninsured motorist coverage. The standard coverage is an amount equal to your liability coverage. If you have the minimum, $25,000/50,000.00 for liability, then that is likely what you have for uninsured motorist coverage. You may purchase additional coverage up to an amount double your bodily injury liability coverage. Whatever coverage you have will be the cap that your own insurance company will pay you for your injuries and losses. If you have the minimum coverage, believe me when I say, that does not go very far, especially with an ambulance ride, hospital bill, and maybe some time lost from work. Take a look at Attorney Mather’s Blog titled “We Have to Protect Ourselves.” It lays out a great cautionary tale on why this type of insurance is so important!
• Underinsured motorist coverage. The standard coverage is also the amount equal to your liability coverage. If you are hit by a driver that has lower policy limits then you, your insurance company will allow you to recover the difference between the two policies (assuming your damages warrant such a recovery). For example, if you are hit by a driver and injured, and that driver has the minimum coverage of $25,000.00, but you have $100,000.00 of your own insurance, you can recover the $25,000.00 from the responsible party, and then recover up to $75,000.00 from your own insurance policy under your underinsured motorist coverage benefits. You can also pay for conversion coverage, but that is a topic I will cover in Part 2.
While you certainly want to make sure you have enough liability coverage to protect yourself and your assets in the event that you injure someone else, don’t forget to make yourself and your family a priority. Get that extra uninsured/underinsured motorist coverage. I’ve never met a person who was unhappy to have too much insurance when they needed it. There are simply too many people who drive around without insurance. There are just as many, if not more, who drive around with inadequate insurance coverage. Don’t put your trust in others to protect you and your family. Protect yourself. If the time comes, and you need to use your uninsured/underinsured motorist coverage, don’t sweat it. Using this coverage is not supposed to raise your rates. If you are eligible to use this coverage, it means you were not at fault for the collision. So again, don’t be shy to get the necessary coverage and to use it when needed. As always, the attorneys at Dressler Law are here to help you navigate the confusing and somewhat boring waters of the insurance industry. Have a question, call or email me!