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Protecting Yourself from Uninsured Drivers
In Minnesota, 12% of all drivers do not have car insurance. This places other drivers at an increased risk of an accident with an uninsured driver. So what can responsible drivers do to protect themselves from uninsured motorists?
June 03, 2009 /Seniors PR News/ -- Protecting Yourself from Uninsured Drivers
Article provided by McSweeney & Fay, P.L.L.P.
Visit us at www.mcfay.com
Although the total number of drivers without insurance has declined nationally in the last few years, the economic downturn is forcing families to make tough financial choices. Unfortunately, this often results in an unpaid car insurance bill.
The Insurance Research Council found a direct correlation between rising unemployment rates and an increase in uninsured drivers. The Council estimates that if the economy does not improve by 2010, one out of every 10 drivers in the country will not have auto insurance.
In Minnesota, 12% of all drivers do not have car insurance. This places other drivers at an increased risk of an accident with an uninsured driver. So what can responsible drivers do to protect themselves from uninsured motorists?
Minnesota is a No-Fault insurance state. This means that anyone involved in an accident can make a claim under his/her own insurance policy for payment of medical bills and/or wage loss, regardless of who is at-fault for the accident. All car insurance policies in the State of Minnesota include personal injury protection (PIP) benefits. At minimum, PIP benefits must pay up to $20,000 in medical expenses and up to $20,000 in non-medical expenses such as lost wages per accident, per person.
Uninsured and Underinsured Motorist Coverage
In addition to requiring No-Fault coverage for payment of medical bills related to an accident, Minnesota law requires all drivers to carry minimum levels of uninsured (UM) and underinsured motorist coverage (UIM).
Uninsured (UM) coverage covers you when an at-fault driver fails to carry automobile insurance. Whether or not another driver has insurance will not affect your ability to recover money for your injuries, pain and suffering, unpaid medical bills, unreimbursed wage loss, or any other out of pocket expenses related to an accident.
Underinsured (UIM) coverage covers you when an at-fault driver does not have enough insurance to adequately compensate you for injuries sustained in an automobile accident. For example, if a Minnesota insured driver causes an accident and only has the minimum $30,000 liability limits that the State requires, you can then turn to your own insurance coverage for this extra "underinsured" coverage.
The minimum required amount of UM/UIM coverage in Minnesota is $25,000 for injuries to one person and a maximum $50,000 for injuries to two or more persons per accident. However, these minimums are not likely to provide enough coverage if you are involved in a serious accident resulting in severe injuries. Brain, spine and other serious injuries can result in hundreds of thousands of dollars in medical expenses and lost wages can sink any person or family, no matter how much money you earn.
We recommend that all Minnesota drivers increase these relatively inexpensive coverages to at least $250,000 per person, $500,000 per accident.
UM and UIM coverages are insurance on yourself - think about it like disability insurance or life insurance. These coverages take care of you, your family members, and anyone else riding in your car at the time of an accident. If you are adequately protected, you do not need to worry about whether other drivers on the road are carrying sufficient insurance.
Once again, drivers should purchase additional UM/UIM coverage that provides a minimum coverage of $250,000/$500,000.
It is important to remember that UM/UIM coverage will pay you for your pain and suffering, unpaid medical bills over and above the $20,000.00 PIP maximum, unreimbursed wage loss, future loss of earning and all other damages.
However, while UM or UIM coverages protect you, they do not protect your car. Therefore, if you are involved in an accident with an uninsured driver, you can lose your car if it is a total loss and you do not have collision coverage on the vehicle. To ensure you have insurance coverage for any damage to your vehicle, you should carry collision coverage, which specifically pays for car repair and replacement costs. The other unfortunate aspect of getting in an accident with an uninsured driver is that you will likely be out your deductible. Make sure your deductible is low enough that you can afford to pay it during a time of need.
Stacking Policies
Married couples who own at least two cars should always stack their insurance policies. Your insurance company may not tell you about stacking, but it is allowed and should be utilized in Minnesota. Stacking allows you to double the minimum personal injury protect (PIP) coverages in Minnesota. For example, instead of having $20,000 available in medical expense coverage, stacking will give you $40,000 in potential coverage.
In addition, stacking increases the weekly wage loss maximum from $250 per week to $500 per week. Very few individuals can live off of only $250 per week. The weekly wage loss amount of $250 has not been increased since the No-Fault Law was put into place in the early 1970s. The extra $1,000 per month in wage loss that stacking provides can be the difference between sinking and swimming.
A major accident with an uninsured or underinsured driver can wipe out your savings and rack up thousands of dollars in medical bills. With this in mind, it makes sense to have all of the coverage you can get, and stacking is very inexpensive considering how much extra coverage you get for it.
Umbrella Policies
Umbrella polices provide additional liability coverage in the event you are responsible for an accident, but do not have enough liability insurance to cover the costs of the other party's damages. They do not provide additional coverage for any injuries or damages you may suffer.
Umbrella policies are only necessary if you have significant assets you want to protect from the possibility of a personal injury lawsuit. Most people involved in car accidents only seek recovery from any available insurance policies and do not pursue personal assets. So unless you have significant wealth to protect, an umbrella policy may not be the best option. Instead, you should spend the extra money purchasing additional UM/UIM coverage.
Conclusion
With the economy in a downturn, more and more drivers are just carrying the state required minimum insurance coverages or even no insurance at all.
Therefore, it is essential that Minnesota drivers have sufficient UM/UIM coverages. You cannot control whether or not another driver has insurance, but you can control whether or not you have enough insurance to protect you and your loved ones.
Article provided by McSweeney & Fay, P.L.L.P.
Visit us at www.mcfay.com
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