If you are hit by an Uninsured or Underinsured will you be covered?
This question is consistently the most viewed page on this website month in and month out. Barry P. Goldberg advises his clients, family, friends and neighbors to consult with him before they buy their automobile insurance—particularly, if they are considering dropping or lowering their Uninsured Motorist limits. Of course, everyone is different and their respective insurance needs differ. However, there are some excellent guidelines that may help you decide;
- Your regular third-party liability insurance limits should be adequate to protect you up to your conservative net-worth. If you own a lot—you must insure a lot. If you have little or no savings, home equity or net worth, you will have modest insurance requirements. (Buy your insurance from an agent who will consult with you and make reasonable recommendations.)
- Never eliminate your Uninsured Motorist Coverage.
- I always recommend buying Uninsured Motorist coverage up to an equal amount with your third-party liability coverage, if you can afford it. This means, if you have $100,000 in liability coverage, you should buy $100,000 in Uninsured Motorist coverage. (Exception: always purchase the $30/$60 option even if you have a state minimum $15,000 liability policy!)
- Do not assume that your insurance company will recommend the proper coverage—they won’t—and worse, they have no duty by law to recommend the proper amount of insurance coverage.
Uninsured Motorist Coverage is a relative Bargain!!!!!
Mr. Goldberg recently requested a “real time” written quotation for his personal automobile to provide a solid “real world” financial example of the actual cost of adequate Uninsured Motorist coverage. Of course, the quote you receive will vary depending on your driving record, the price of your vehicle and other minor underwriting criteria. It is not a “guarantee” by any means. Here goes:
15/30 Coverage(meaning a maximum of $15,000 per person and $30,000 per accident, total regardless of the number of claimants.):
$30 per year!
25/50 Coverage $45 per year.
50/100 Coverage $60 per year.
100/300 Coverage $78 per year.
Some companies will offer higher limits such as 250/500, 300/300, 300/500, or 500/500. Some of those companies will only offer those limits when accompanied by an “umbrella” policy, typically up to $1,000,000. You know that Barry P. Goldberg recommends as high a limits as you can reasonably afford. But, for a mere $78 per year, very adequate coverage is available. For roughly $15 per year you can advance to the next level of coverage in most cases.
Insurance Companies and Agents Have an Interest in Keeping Your Uninsured Motorist Limits Too Low
After 30 years as a personal injury trial lawyer in Southern California, Barry P. Goldberg has seen every reason and excuse argued by well-intentioned insurance agents and insurers who leave their insureds open to uncovered losses when they are involved in automobile accidents with Uninsured or Underinsured motorists. The main reasons are usually rationalizations designed to lower the insurance premium so that the insurance seller can be more competitive in the market place. Be aware that in California, an insured must sign a specific “waiver” before the insurer can issue a policy without Uninsured Motorist Coverage—Never sign such a waiver without receiving legal advice first! The auto insurers in California are enjoying record profits due in part to low limits—-meaning less high exposure.
Misguided agents and insurers sometime argue that you do not need Uninsured Motorist Coverage. They pose a question to the customer; “Do you have health insurance? If so, that’s all you really need to protect your family if you are in an accident with an Uninsured motorist.” The follow up question is usually something like this: “Do you really need damages like pain and suffering if you are in an accident with an Uninsured motorist? Because an accident with an uninsured motorist is unlikely, the cost of buying the insurance outweighs the value of receiving money over and above your medical bills. Besides, why should you pay for some irresponsible uninsured motorist’s liability insurance?”
In reality, most drivers in Southern California cannot afford to incur significant lost earnings after an accident and injuries for a significant automobile accident can affect future earnings and greatly reduce the quality of life. Most Southern Californians require reasonable compensation just to have a chance to be put back in the position they were in immediately before a major accident. Despite public perception, a “windfall” from an automobile accident is rare and unlikely.
Health insurance today often does not cover significant injuries and recovery therapies designed to get you well faster and back to work sooner. Reputable doctors, chiropractors and physical therapists may be outside of your health insurance network. Many insureds have large deductibles and co-pays. Only by receiving uninsured motorist and underinsured motorist compensation can you guarantee access to these health care providers.
Under the California Financial Responsibility Act, Uninsured Motorist coverage is an important element in making certain that Californians are protected. Not only are medical bills, lost earnings and future losses recoverable, but other out of pocket expenses like home health care, babysitting, and personal assistance. Anyone who has been injured in an automobile accident knows that it is important to receive compensation for pain, suffering and inconvenience.
While you should consult with your insurance agent, the relative cost of Uninsured Motorist coverage is low or moderate. On the other hand, a high percentage of automobile accidents in Southern California and the Los Angeles area involve uninsured and underinsured motorists.
If you do not ask, it is likely that your insurer will issue your policy with Uninsured Motorist coverage of $30,000 per claimant and $60,000 per accident even if your liability limits are significantly higher. In most cases, an automobile insurer will offer Uninsured Motorist Coverage equal to the amount of your liability policy—you just have to ask! For the state minimum liability limits policies, automobile insurers are permitted to sell lower limit policies of $15,000 per claimant and $30,000 per accident.