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Date: October 10, 2004
Re: Auto Insurance Coverage
I feel that it is very important for you to review your auto insurance coverage if you have not done so recently. Because my law practice includes representing individuals who have been injured in automobile accidents, several recent cases have
been brought to my attention that too many of my own clients have serious auto insurance coverage deficiencies. Recent increases in medical costs and the price of automobiles have
often resulted in inadequate automobile
insurance coverage for my clients.
A recent case that comes to mind involves a client of mine who was in a small impact auto accident. He hit the headrest and immediately felt that he had suffered a neck injury. He was transported to a local hospital by Medic One where he was treated with extreme care in the ER and given all the x-ray and MRI tests available for this type of injury. While my client indeed was injured and suffered soft tissue injuries, he was able to walk out of the hospital at the end of the day. However, the exam and testing totaled one tall latte short of $10,000. My client's visit to the ER had
exhausted what is known as the Personal Injury Protection (PIP) coverage under his
own auto policy. Until his case is actually settled, my client and his own insurance company will have to pay the tab for the ER care and all further medical care. In this case there is no additional money available for continuing medical care.
PIP coverage also provides for wage loss which may be a very important benefit following an auto accident. In another
recent case, my client, a commissioned salesperson,
was able to go back to work shortly after the accident,
however, his performance clearly suffered as a result of his injuries. His
own PIP coverage was an important source of recovery for his wage loss since his total claim exceeded the insurance coverage carried by the driver who was responsible for the accident.
The State of Washington requires drivers to carry only $25,000 of liability coverage and in many cases that is all the coverage that is being carried by the driver following you down the road with a cell phone pressed to his/her ear. If you are hit and injured by that driver and your injuries and wage loss exceed the other driver's coverage of $25,000, you will be seeking to collect the balance of your damages and loss from your
own insurance company. This coverage is called Under Insured Motorist or UIM coverage. This coverage will also protect you from the driver who is not carrying
any auto insurance whatsoever. A recent study concluded that 24% of the drivers on the road do not carry auto liability insurance. Therefore I'm urging you to look at
your Policy Declaration Page and see what the limit is for the UIM/UM portion of your policy, as this
may reflect the funds available to make
you financially whole following an auto accident.
Please look at the Declaration Page of your policy and call
your Agent to confirm the amount and extent of your
coverage. A recommendation you might consider is to carry Liability and UIM/UM limits referred to as 250/500/100. Such coverage provides $250,000 per injured person, $500,000 total per accident and $100,000 for property damage. If your estate is such that you require greater protection, you should ask your insurance company about an umbrella policy that will cover losses that exceed the limits noted above. These policies are generally sold in $1,000,000 increments and are
not very expensive.
The property damage portion of the policy brings to light another trap for those who have not reviewed their auto policy in some time. As noted above, Washington State only requires property damage coverage at $10,000. Many of my clients have had the same policy for ten or more years and I find that they are carrying only $25,000 of property damage coverage. In some policies the coverage is shown as 100,000/300,000/25,000. The last figure is the property damage coverage and it is limited to a total of $25,000 per accident. A recent accident, involving a client who was at fault, resulted in three completely totaled vehicles. Fortunately for my client, the loss of the two other older cars came to the sum of $24,500. His Collision
Coverage reimbursed him for the loss of his own auto. In the event one of the other cars had been a new Porsche or SUV (or almost any new car for that matter), my client would have been facing a serious out-of-pocket financial loss. As I mentioned above, I recommend a minimum coverage for property damage at $100,000.
Again, I wish to emphasize that these coverage limits in your own policy are very important if you or your passengers are injured while riding in your automobile regardless of who is at fault. In summary, I suggest that you consider 250/500/100 for both liability and UIM/UM coverage and carry at least $25,000 of PIP coverage or more if your budget will allow, since this also provides you with wage loss protection. May I suggest that you call your auto insurance agent and review your auto coverage and the protection it may or may not be providing for you and your family?
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I understand and acknowledge that
John A. McGary and the Law Firm of John A.
McGary have made available on this site certain informational articles of general legal interest which may be informative on a topic in which I may be interested. I understand that this information is not intended as legal advice, whether specific to any particular situation or generally. I agree not to rely on articles accessed through this site, but will obtain all legal advice and assistance needed by me from a licensed attorney at law.
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