Do You Have Enough Insurance Coverage?

Recently, I settled a client’s car wreck case. My client had been involved in a serious car wreck, and he sustained a herniated disc in his neck and a torn rotator cuff. After all of his medical treatments were finished, my client had over $60,000 in medical bills. The problem, the guy who hit him only had $30,000 in insurance coverage.

This situation is very common. In Texas, all drivers are supposed to carry at least $30,000 in liability coverage. Unfortunately, in Texas, over 14% of drivers carry no insurance at all. As you might guess, the people who aren’t responsible enough to carry insurance, are probably the most likely to get into a car wreck.

In order to prevent a situation where you are left without insurance money to cover your losses, there are a couple of options you should consider. First, there is Personal Injury Protection (PIP) insurance. PIP is a no fault insurance coverage that provides up to $2,500 in insurance coverage if you are involved in an car wreck. Money from a PIP policy can be used to cover medical bills and lost wages. When you purchase insurance, PIP coverage is automatic unless you sign a waiver.

Next, there is Uninsured/Under Insured Motorist (UM/UIM) coverage. This coverage applies when the negligent driver either has insufficient insurance coverage, or no insurance coverage at all. The minimum UM/UIM coverage in Texas is $30,000. However, if you have a higher liability limit than the minimum, you can purchase a UM/UIM policy equal to your liability limit. I would personally recommend having a UM/UIM policy equal to your liability limits, and I would recommend getting as much liability coverage as possible. After all, why would you want to provide greater protection to a stranger than you would yourself?

In my example above, my client simply wanted to purchase the cheapest insurance policy that he could. Unfortunately, that meant going to a discount insurance company that had him sign the PIP waiver and didn’t recommend to him that he should get UM/UIM coverage. For just a couple of more dollars per month, my client would have had another $32,500 in insurance coverage available to him to cover his medical bills. Unfortunately, that wasn’t the case (I did get his medical bills reduced, and he did get some money for his injuries, but it should have been more.)

Remember, the next time you are shopping for car insurance, you want to protect yourself as much or more than the stranger next to you in traffic. When you consider your policy amount, I would strongly recommend getting as much liability coverage as you can afford, UM/UIM coverage equal to your liability limits, and never sign the PIP waiver.

If you made it all the way to the bottom of a blog about insurance coverage, God bless you!

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