Wednesday, June 27, 2012

You Probably Don't Have Adequate Motor Vehicle Insurance: Tips to Protect Yourself

We Arizonans cherish our right to drive hither, thither and yon. This month we speak on a topic that is often overlooked and definitely misunderstood (sometimes misrepresented) – Motor Vehicle Insurance. Pinching pennies on this coverage can have unfortunate consequences.

It is estimated that there are presently 5 million licensed drivers within Arizona. Of this sum, approximately 25% are uninsured and a much higher percentage are underinsured. This probably includes you. Surprisingly enough, our exit polls reveal the majority of you are underinsured. If you are one of those living under the "it can't happen to me" philosophy hopefully it will not-but it can.

The State of Arizona merely requires that you must carry insurance that will pay a guaranteed minimum of $15,000 per person injured, with a guaranteed minimum of $30,000 total coverage for the accident. In Arizona, the required minimum for property damage is $10,000 (on an insurance policy, the coverage limits would be shorthanded as 15/30/10). Further, all individuals can elect to carry a minimum of $15,000 per person and $30,000 per occurrence of underinsured and uninsured (UIM/UM) policy limits. The maximum amount of UIM/UM coverage cannot exceed your liability limits.

Assuming you carry the statutory minimum of liability insurance (15/30/10) and you are in an accident that is your fault, there will be a maximum of $15,000 of insurance coverage available per individual injured for a total of $30,000 per occurrence. So, if two people are injured in an accident that you cause and each of those people sustain injuries that total $25,000, the minimum insurance will not cover their total damages. Each will only receive $15,000. If you are in an accident and it is someone else’s fault and they have inadequate or no insurance, the maximum available to you and your passengers will be $15,000 per person and $30,000 per occurrence, assuming you purchase UIM/UM coverage. If you follow the trend of accidents in Ahwatukee Foothills and the Phoenix Metropolitan area, by and large, this amount of coverage is not going to be enough to protect you and your loved ones in anything other than a minor fender bender. "In countless cases individuals lacked adequate insurance on both sides of a loss." Not only is there a general mentality that “it cannot happen to me”, but there is also a belief that less insurance is better to avoid being forced into litigation. This is nonsense.

Automobile insurance also includes coverage for property damage, a rental vehicle, roadside assistance, etc. Most of these areas are self explanatory and relatively easy to evaluate, especially when it comes to property damage and deductibles.
Medical payment coverage, however, is another area that is often misunderstood. The common representation among many insurers and brokers or agents is that those who have health insurance do not need medical payment coverage. We don’t know what health insurance policy these folks possess, but it is not any that the majority of us own or are covered under. Deductibles, co-pays, uninsured conditions, balance billing, etc., all are reasons that medical payment coverage is cheap insurance. If this is not enough, all you need to know is that the majority of policies do not require a repayment of medical payment coverage in connection with any personal injury claim. Further, it is a no fault benefit, so to speak. Translated, your insurer will provide this coverage regardless of fault.

Cyclists, walkers, roller-bladers, joggers, and general outdoor enthusiasts who brave our streets, don’t forget your vehicle insurance may apply to a loss you or a loved one suffers that involves a motor vehicle. The simplest example is being hit by a car. But there does not necessarily need to be contact with a motor vehicle.

For those of you going to Mexico, don’t forget to cross the border with your Passport and Mexican Auto Insurance. Costco even sells this insurance now. Many US insurers require Mexican Insurance on your vehicle as a prerequisite to any coverage in Mexico for an accident. Check with your insurance representative and then check again as to what is required for your US Policy to protect you in Mexico.

There is no magical formula as to calculating what appropriate liability, underinsured or uninsured policy limit is. You need to assess your financial needs and driving patterns to purchase adequate protection. Consult with a lawyer who does this type of work or an insurance agent who is keen to your personal situation. Then choose the coverage that is right for you.

Like death, many avoid planning for the catastrophic events that occur with regularity in our mobile society. Unpleasant as making sure you are sufficiently protected may be, doing it may mean the difference between losing everything and/or weathering any storm.

If you have any questions, please contact the Arizona Injury Lawyers at CKGH Law, P.C. (