How Much Insurance Coverage Should I Have?

Insurance CoverageCLIENTS OFTEN ASK US, ‘HOW MUCH INSURANCE COVERAGE SHOULD I HAVE TO PROTECT MYSELF IN THE EVENT OF INJURY?’.

 

Excellent question, and a wise one to ask before that coverage is needed.

The best answer is:

You should have enough insurance coverage to cover your assets, your medical expenses, damage to your vehicle, damage to the other driver’s vehicle, and the other driver’s medical expenses.

Have I lost you? The amount of coverage that should be carried will vary depending on each individual circumstance, but it is never a good idea to buy the minimum amount of coverage required by law.

If it sounds like our firm is owned by an insurance company, be assured that just the opposite is true. As attorneys who represent victims of personal injury, our interests are often directly adverse to the insurance company’s interests. However, both sides agree that individuals should buy more insurance. We want you to have better coverage and insurance agencies want to charge you slightly higher premiums (“slightly” is highlighted because you can often double the amount of coverage for less than a fifty dollar increase in rates).

With this blog posts and the two that will follow in this series, we want to take you through how an attorney views auto policy coverage. Really, you probably don’t care about how much coverage you have until you are involved in an accident. You should think about how much coverage you have LONG before you have an accident. So, let’s go through the various parts of an auto policy, piece by piece. This post will cover PIP (Personal Injury Protection); the next two will cover Liability, and UM/UIM (Uninsured/Underinsured Motorist Coverage).

Disclaimer: As personal injury attorneys, we focus on the injury to your person. It really is as simple as it sounds. This means we will negotiate the value of your vehicle with the insurance company, but it is a very small part of what we do, and therefore these posts will not discuss compensation/collision coverage for your vehicle.

PIP: PIP stands for Personal Injury Protection.

  • The standard minimum PIP coverage is $2,500.00.
  • Your auto insurance company will pay this amount for your medical bills (and depending on your policy, even lost wages) without any regard to who was at fault in the accident.
  • This is why PIP is sometimes referred to as “no fault” insurance.
  • Your premiums will not go up if you make a PIP claim.
  • Also, your insurance company will not seek any reimbursement back from you upon paying out this money on your behalf. Ordinarily anytime an insurance company — health insurance or auto insurance company — pays your medical bills, they expect to be reimbursed for those payments if you receive money in the form of a settlement or judgment against the defendant or the defendant’s insurance company.
  • So, with PIP, you really get a double recovery. Your insurance company pays for your medical bills, and the defendant’s insurance company pays for your medical bills, but your insurance company doesn’t ask for a reimbursement of the money they have paid out for you.

Personal injury attorneys in our firm have seen policies that have $5,000 or $10,000 of PIP coverage. We suggest that anyone buying an auto policy should try to secure $10,000 of PIP coverage. This way you know you will at least have the first $10,000 of your medical bills (and possibly lost wages) covered with no questions asked.

As always, if you can afford even more PIP coverage, you should buy it.

Stay tuned for the next installments in our series!

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