Holy Accident, Batman! Under-insured?

It’s a beautiful weekend and you decide to go shopping in Kittery. You’re not thinking about being under-insured while crossing Route One in a crosswalk to get – THWACK! ZOWIE! KABOOM! A distracted driver hits you. Though your journey to recovery could be long and painful, you have the comfort of knowing that the driver’s insurance will pay for your hospital and medical expenses. Well, surprise, a high percentage of drivers in Maine, New Hampshire and Massachusetts are under-insured. What do you do now?

In Maine, all drivers must carry liability insurance in the event they cause bodily injury to another, to ensure medical bills get paid for the victim. The law requires minimum bodily injury limits of $50,000 each person/$100,000 each accident, or a combined single limit of$125,000. The minimum amount of insurance, however, may not be enough to cover accidents involving injuries, time lost from work, and medical expenses. Higher limits are available, but many people do not upgrade their policies.

This is where Uninsured Motorist (UM) and Under insured Motorist (UIM) coverage comes in. Review your own auto policy today, and make sure you have adequate limits for uninsured / under insured motorists to protect you and your passengers from the actions of others. Given today’s cost of health care, you’ll be glad you did! UM will also cover you or the family members in your household for injuries from another car while walking or biking or while riding in another car.

Below is a more thorough explanation from a consumer guide posted by the Maine Department of Professional and Financial Regulation,

Maine law requires every vehicle owner or operator to carry liability insurance, uninsured motorists, and medical payments coverage.

To satisfy the financial responsibility law in Maine, you must buy a minimum of $50,000 liability for the injury to or death of any one person;$100,000 liability for one accident resulting in injury to or death of more than one person; and $25,000 liability for property damage. These amounts are usually shown as $50/100/25 on your insurance policy. A combined single limit(that combines bodily injury and property damage liability) of $125,000 is also acceptable. You cannot register your vehicle without proof that you have this minimum amount of insurance. Uninsured motorist bodily injury of $50/100 or combined single limit of $100,000 and a minimum of $2,000 for medical payments coverage is also required.

Keep in mind that these minimum amounts may be too low for your situation and you may want to buy more coverage. You should base your decision on what assets you need to protect from claims that may exceed the minimum amounts. As you raise your coverage, your premiums will also increase; however, the extra cost of higher coverage tends to be relatively low.

Purchasing a personal umbrella policy is one way to have higher limits of liability inexpensively. An umbrella policy provides broad liability protection over and above the liability limit of your auto policy. It will also cover some exposure to losses that your auto or homeowner’s policies do not cover. Most umbrella policies require you to have at least $250,000/$500,000 or $300,000 single limit on your auto policy. The umbrella policy or endorsement generally adds an additional $1,000,000 limit.

What is Liability Insurance?

Most auto liability insurance policies contain three major parts:

• liability insurance for bodily injury
• liability insurance for property damage
• uninsured / under-insured motorists coverage

Bodily injury liability insurance does not protect you or your car directly. If you cause an accident in which other people are injured, this insurance protects you against claims for damages such as their medical expenses, lost wages, and pain and suffering. This insurance coverage will also pay if a member of your family who lives with you was driving your car, or another person was using your car with your permission.The maximum amount that your insurance company pays for any one person injured in an accident and the amount available for multiple injured parties is determined by the amount of insurance you buy. The amounts are shown on the Declarations Page of your policy. As stated above, you must purchase a minimum limit of $50,000 per person/$100,000 per accident, or a combined limit of$125,000 which includes the minimum amount required for property damage.

Property damage liability insurance pays for any damage you cause to the property of others, like a crushed fender, broken glass, or a damaged wall or fence. Your insurance will pay for this damage whether you are driving your car or whether it is being driven by another person who has your permission. The minimum limit required by Maine law is$25,000.

Uninsured/Under insured motorists (UM) coverage is a required coverage under Maine law. It applies when you are injured by an at-fault driver who:

• cannot be identified (is a hit-and-run driver)
• does not have the required auto liability insurance (an uninsured driver); or
• has liability insurance limits that are lower than your own UM limits (an under insured driver)

UM covers your family members and other passengers who are injured while in your car. UM will also cover you or the family members in your household for injuries from another car while walking or biking or while riding in another car. UM does not cover the other driver’s injuries and it does not cover damage to your vehicle or other property. The purpose of UM is to provide you with the same personal injury recovery that would have been available if the at-fault driver had insurance to the same extent as you.

Your policy’s UM coverage must equal its liability coverage limit unless you specifically elect a lower limit. If you want less UM coverage, your insurance company must give you a rejection form and you must sign it before</strong? the effective date of the policy. However, even if you decide you want UM coverage that is lower than your liability coverage limit, you may not have less than the minimum required amounts of $50,000 per person and $100,000 per accident.

Umbrella policies do not usually cover uninsured motorist claims.

That’s why we counsel our customers to get a level of coverage that protects them from the actions of others. Even the Caped Crusader would endorse having that kind of protection.

Photo by danielmoyle