A New Year – Make Better Decisions About Your Car Insurance

2017 is now over, and it has given way to the promise and possibilities of a new year.  The new year is often seen as a time of change, especially among those of us who make resolutions to try new things, to right old wrongs, and to improve.  This year, the Alexandria Injury Attorney would like to invite you to look at and consider your car insurance – is there anything you might want to change, fix, or improve?

Car insurance is not exciting, and to many people it is forgotten as soon as the check is sent or electronic debit taken.  It is, however, absolutely vital to anyone operating a vehicle (to say nothing of the legal obligation!).  Because car insurance is so important, please take a few minutes to review your policy and consider a few things.

How do I review my policy?
Each and every insurance policy, whether car, truck, van, motorcycle, motor home, etc., has a declaration sheet (or page).  This is usually the first 3-5 pages of the insurance policy itself. This document is very important, as it sets out all of your coverage at a glance.  If you do not have a copy handy, you can obtain one from your insurance company through their online portal, or simply call the carrier and most will email you a copy right away.

Once you have your declaration sheet, take a look at what coverage you have.  Check our your coverage in light of the following information and recommendations:

Bodily Injury Liability
This coverage protects you if you are sued for someone else’s injuries.  In the DC Metropolitan Area, required bodily injury liability limits vary, but can be as low as $20,000 per person, $40,000 per accident (usually referred to by insurance agents as “20/40″).  This may be the legal minimum, but consider a “simple” accident on the interstate.  Ambulance bills, emergency room bills, the doctor and x-ray technicians (billed separately!), primary care doctor bills, physical therapists’ bills – these add up very quickly.

When assessing your coverage in this regard, ask yourself a simple question – is it enough?  Other common limits are 25/50, 50/100, and 100/300.

Check with your insurance company and you will find that by substantially increasing your bodily injury liability limits, your insurance premium may only slightly increase.  Call your insurance agent or carrier to ask what the change in your premium would be.  You may be very surprised.

Property Damage Liability
Property Damage Liability relates to how much your insurance company will pay for the damage inflicted on another vehicle or “property.” Most people try to keep this number as low as possible, and that is understandable.  However, as a rule, your insurance is there to protect you – but the insurance company only protects you up to the limit.  So, consider an accident between you and an old Yugo.  Your current coverage may be fine.  But now consider driving in the DC Metro area – what if you hit a Mercedes?  A BMW?  A Tesla???

Med-pay/PIP
Medical expense payments (or medpay) and PIP (personal injury protection) are excellent resources available to vehicle owners, but many drivers do not elect it, or do not understand what it is.  Click here for our explanation of PIP and Medpay.  In short, Medpay (or PIP) is a no-fault benefit that reimburses you for the cost of medical care and lost income resulting from an injury accident.  Given how quickly medical bills add up, we very strongly recommend everyone elect medpay or PIP coverage.

Medpay amounts vary considerably based on state and provider.  The final decision is yours, but on average, electing $5,000 of medpay coverage may raise your premium only a few dollars a month, and that is definitely worth it.

Collision coverage / deductible
Collision coverage comes into play when your vehicle is damaged, and there is no recovery available, such as a single vehicle accident, striking a pole, etc.  This is the coverage where a “deductible” comes into play.  Many companies offer about $500.00.  This coverage is handy for its purpose, but you should consider your vehicle when using it.  A newer car might have more extensive damage, and getting the coverage may make sense.  An older model car, however, may be worth less, and having this coverage may not be the most practical or financially sound decision.

One rule of thumb regarding collision coverage – if the insured vehicle is ten years old or older, this coverage may not be a wise investment.

Gap Insurance
Did you know that a brand new, factory fresh car drops in value the minute you drive it off the lot after signing on the dotted line?  It’s true, and it’s called depreciation.  Now, imagine driving this brand new car home, and getting into an accident where the new car is totaled!

We know its not nice to think about, but it does happen.  The insurance company only insures the value of the car, and remember – you drove it off the lot, so it’s now worth less than what you paid.

Gap insurance protects you from owing the difference to a finance company between what the vehicle is worth compared to what the vehicle cost you in the event of an accident.  This coverage comes in handy if you’re insuring a brand new car, but may not be a wise investment otherwise.  When considering this coverage, check the blue book value of your car.

Uninsured/Under-insured Motorist Coverage
Uninsured Motorist Coverage (UM) is mandatory in all DC Metro jurisdictions.  However, some insurers actually let you, the customer, lower the amounts the insurance company provides.  This is a very dangerous option, and one we recommend against.  To quote Benjamin Franklin, it is penny-wise, and pound foolish.

UM is a very helpful tool – indeed, a necessity – to protect you, your family, and your passengers if you/they are injured by someone with low policy limits or no policy at all. We firmly recommend having UM coverage that is as high as your bodily injury liability limits.

Uninsured motorists are a real concern, but do not only encompass the visage of a speeding car without coverage.  UM also comes into play when a hit-run accident occurs, or an at-fault driver’s coverage is insufficient to cover the damages you suffered (in that scenario, it is referred to as Under-insured motorist coverage).

We hope this guide has been helpful to evaluating your auto insurance coverage in the new year.  This decision, while not glamorous, can effect you and others greatly if the unthinkable happens, and you are involved in an accident.

If you are having trouble making a decision about your insurance coverage, or are confused, or just have some questions, please give us a call, and the Alexandria Injury Attorney will be happy to assist you with a free car insurance consultation.  Call us today at 703 879 5910