Understanding Auto Insurance: Coverages, Limits, and Importance.
Coverages, Limits, and Importance.
I’m Mike Ashworth, a personal injury lawyer in Tulsa. Insurance, nobody likes to use the word insurance, but there’s a reason why Lloyd’s of London invented insurance several hundred years ago to protect merchants in the maritime. Insurance is something we deal with most often in auto insurance and homeowner’s insurance.
Today I want to talk to you about auto insurance and we’ve done this discussion before. What does it mean to have all these coverages? You got collision, you got liability, you got property. What does all this mean? Well, we’re going to talk about two of the single most important.
State Minimum Liability Insurance
Now, under Oklahoma law, you have to have a state minimum of $25,000 worth of liability insurance. And a lot of people, that’s all they have. They have the bare minimum. There’s certain insurance companies that actually, how do I say this, specialize in what they call high risk drivers.
Well, what happens now, $25,000, I know you won’t disagree, does not go very far. How many times have you been in an automobile accident, you say, oh, it wasn’t too bad, you were able to walk away, and you look at the damage to your car, it’s not going to be that bad. And the next thing you know, they look at the wheel, they look at the rim, they look at some of the damage associated with it, next thing you know, it’s $4,000, $5,000, $6,000. It can happen.
On top of that, what happens if you get in an automobile accident and you’re severely injured? You hit your head, you have traumatic brain injury, you have neurological damage as a result of that. I mean, you’re headaches all the time, dizzy, etc., wobbly. They may be talking about doing surgery for you, and you are hit by somebody who’s at fault, and they only have $25,000 in coverage. What are you going to do?
Uninsured Motorist (UM) and Medical Payments (MedPay) Coverage
Well, here are the things that we stress over and over and over, even here at the firm. I ask people, bring me your declaration page for your insurance policy on your auto, and let me look at it. What you wish to do is talk to your agent, if you go through the agent as opposed to going online, is what is UM, what is MedPay?
MedPay is no-fault coverage. It doesn’t matter if you’re at fault, they’re at fault, you’re each at fault. If you have MedPay, let’s say for example $10,000 is the cap that I’ve seen, then as soon as the bills start piling in on you, and they’re complaining about getting paid, we can put a MedPay claim in for you to get those bills paid, and get them taken care of.
UM is this, that $25,000 driver that doesn’t have enough insurance to adequately cover, even come close to covering your actual injuries, your actual damages. Your insurance coverage under UM and UIM will make up the difference to an extent. For example, you get hit by the $25,000 driver, you have approximately $85,000 of actual insurance, I’ll just write that, of actual damages, well what happens is the uninsured motorist, or underinsured motorist kicks in. Let’s say you have $100,000 of coverage in that, then that $100,000 would be used to apply to the $85,000 difference after the $25,000 is kicked in from the tortfeasor or the driver at fault. It’s extremely valuable in this state because we are a horrible, horrible state for uninsured drivers.
That’s the other thing, if the driver is completely uninsured and has zero, they’re not likely to have any assets to be able to pay for anything anyway, then your uninsured motorist coverage will kick in. Do not waive that coverage. If you’re going through an agent, they may ask you to sign a waiver of your UM, UIM, do not waive that coverage. I can’t give you actual binding coverage, but I’m telling you, I tell my family and friends and my colleagues, get it. It’s invaluable. We had a case today where it became extremely important.
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