Underinsurance – Protection For You And Your Family
by Edward Knox
In North Carolina, the minimum liability coverage required is $30,000. If you are involved in an accident and you receive substantial injuries and damages, the MOST you would be eligible to collect would be $30,000 from the at-fault driver. However, you can protect yourself and your family by carrying what is known as UNDERINSURANCE. If you are seriously injured in an automobile accident and the defendant only as a $30,000 liability policy, you can exhaust the defendant’s coverage and then be eligible to apply for your underinsurance coverage. In most cases, defendants seldom have enough coverage to pay medical expenses of the injured and most probably never for pain and suffering and lost wages.
Example: Mary and her family are injured, by the negligence of the Defendant. Mary’s bills alone were over two hundred thousand dollars ($250,000.00) and her business closed because she couldn’t work. Mary had multiple injuries to her spine. The Defendant had fifty thousand dollars ($50,000.00.) Mary did have an underinsurance policy of one hundred thousand dollars ($100,000.00.) In this particular case, Mary was left with a net loss of hundred fifty thousand dollars on her medical bills, the loss of her business, no reimbursement for her lost wages and nothing for her pain and suffering and future medical treatment. So even though Mary had underinsurance, it helped but was not enough for the traumatic injuries she sustained. Had she carried $300,000 underinsurance, she would have been better equipped to protect herself.
Example: Cliff was run over by a truck while riding his motorcycle. He broke both legs and had to move to a downstairs apartment. He did not work for months. His medical bills were over one hundred thousand dollars ($100,000.00) and his lost wages were very high. He had permanent injuries. The Defendant driver had thirty thousand dollars ($30,000.00) liability coverage. Cliff had fifty thousand dollars underinsurance ($50,000.00), so he could recover an additional twenty thousand dollars ($20,000.00.) Again, an increase in underinsurance would have protected him.
Another source of protection for you and your family is medical payment benefits. Even if you carry major health insurance, it most likely will pay only eighty percent of your medical bills. There are still deductibles to deal with. Medical payment benefits pays for your medical bills up to the amount of the coverage you purchase. You can use these benefits even if you are at fault for the accident. If you need to use these benefits, your insurance rates will not increase. The cost is minimal. This is one of the best coverages you can purchase to protect your family at a very low rate.
The bottom line is that over ninety percent (90%) of the time, in injury cases we handle, there is never enough liability insurance to adequately compensate victims. The state minimum of thirty thousand dollars ($30,000.00) will permit you to drive on the highways, but it is totally inadequate to protect you whether you injure someone or you are injured by another.
Take the time to compare rates. Ask your agent what an increase in your liability, underinsurance and uninsurance, medical payments coverage and collision coverage will cost. You will be surprised at how little extra it does cost to adequately protect your assets as well as your family.
If you aren’t sure you are properly protected, call us for free advice, your agent, or an attorney you feel comfortable discussing your coverage.
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