Most drivers believe they can make it by with just the minimum required coverage. When you only purchase the minimum required insurance coverage to avoid a traffic violation, you and your family are exposed to potentially devastating financial hardships resulting from an accident.
Most minimum coverage plans leave out some of the most important aspects of insurance coverage, primarily Personal Injury Protection (PIP), Uninsured Motorist (UM), and Under-Insured Motorist (UIM). Auto Insurance is designed to protect you and your family in the event of an accident – not just avoid a ticket in a traffic stop.
Why You Need UM/UIM & PIP Insurance Coverage
Having the right insurance can make all the difference in what you pay after an auto accident, and how your claim is handled. The State of Texas only requires drivers to have liability insurance coverage, which helps the other person in the event of an accident. Liability coverage protects you from the risk of liabilities by lawsuits or other claims from other parties, but it doesn’t fully cover you.
Liability insurance does not include collision or comprehensive coverage to fix your car, towing, rental car, or the other guy being uninsured/under-insured. You might think that everyone has liability coverage because it’s the law, but over half the accident victims who call our law firm have at least one party in the accident who was uninsured! Assuming the other guy has it covered, and skipping the proper coverages to save a few bucks can and will hurt you financially if you are injured, or your car is too damaged to drive (or both). The resulting domino effect can be catastrophic when you can’t work, can’t get to work, and potentially lose your job, home, and your credit rating due to unpaid medical bills. Below are some insurance terms you should get to know. Many people do not know whether they have the following ‘extra’ coverage items:
Personal Injury Protection
‘PIP‘ covers you and the passengers of your car in the event of an accident. PIP covers medical and related expenses, lost wages and collateral costs after an accident. Collateral costs can include child care, lawn maintenance, and even travel expense to receive medical care. PIP covers you even if you are at fault for the accident, making it that much more important to consider when purchasing auto insurance. If you have a good health care plan, comprehensive PIP may not be necessary, but as we all know – health insurance doesn’t cover everything. For this reason, it is always important to go over all of your coverage options for each type of insurance so you know exactly what you are covered for and under which policies. PIP coverage is also valuable is when it covers your passengers. Pip covers non-immediate family members to help alleviate medical cost from both you and them. This is most important when you regularly have passengers in your car, such as a carpool. Your health insurance plan won’t help them, but PIP coverage will.
‘UM‘ coverage helps drivers involved in a crash with an uninsured driver. A surprising amount of drivers are not complying with State minimum requirement laws. UM covers you and your vehicle from damages caused by an uninsured driver in an accident. Additionally, this will cover you and your passengers for medical expenses, pain and suffering, and lost wages. UM coverage is valuable in the event of a hit and run accident as well. Since in that circumstance you are unable to confront the responsible party, UM will give you the same coverage and protection. UM coverage, as with any type of coverage, has different restrictions and limits in each state and with each different insurance company. Check with your agent for details.
‘UIM‘ Coverage is similar to UM coverage in that it covers you when the other driver’s limited coverage cannot. UIM helps take care of the financial burden that happens when you are in an accident with a driver who decided it was better to save a few bucks on their quote, and doesn’t have enough coverage to pay for your injuries or property damage. This type of coverage is usually put into two different types of UIM coverage; bodily injury and property damage coverage. Bodily injury coverage is the more popular type of UIM coverage, and covers your medical expenses when you sustain an injury after an accident with an under-insured driver. Property damage coverage only applies when the other driver is at fault and they do not have adequate coverage. This coverage will help pay whatever the at-fault driver’s insurance plan will not cover. UIM property damage coverage can go beyond just automobile damage to also help recover damages to valuable property such as cell phones and laptops.
The more insurance coverage you have – the better off you will be in the event of an accident, but you need to find coverage that fits your budget. When getting that insurance quote, please take a moment and think about the devastating effects that high medical bills and time missed from work would mean to your budget and your family. PIP, UM and UIM coverage are not required by many state minimum coverage plans, and therefore many people neglect to purchase them. These three types of coverage can and will make it easier for you to recover physically and financially if you are in an accident.