Car Insurance
Since I'm in the business of dealing with car accidents every single day of my life, and i've been blessed to dodge a few. I see how in most cases, an accident can really alter your life not just mentally but financially. One way to help offset such a tragic event is having proper car insurance. Most people don't really pay attention to their car insurance policy until they're in an accident and by then it's too late! I know this is not the most entertaining topic, but I certainly hope this may be educational to someone..
Full Coverage vs. Liability Only
Full Coverage covers you in the event of someone hitting your vehicle and its not your fault. Liability only covers you if you happen to cause an accident. Do not rely on the person that hits you to have insurance, protect yourself!!! It doesn't matter if you drive an '77 Pacer, or a 2008 Jaguar S-Type, get full coverage!
What Does Full Coverage Entail?
A full coverage policy should entail Liability Bodily Injuty, Uninsured Motorist, Underinsured Motorist and an optional medical payments coverage (BI/UM/UIM/ optional Medpay).
Bodily Injury (BI): A "policy limit" is the maximum one can get against your insurance. Now, I know its tempting as hell to be extremely cheap when picking out the policy limits, but this is not the time! Save your cheapness for irrelevant things like not buying the overpriced popcorn at the movie theater. Most states require drivers to have a minimum of "25/50K" per accident. The "25" is the maximum amount of money one person can get in an accident. So for example, let's say you're hit by a drunk driver (God forbid, but stuff happens) who was traveling 100 MPH, and rear ends you. Thankfully you survive! You're taken by the ambulance (approx 1,000$ trip) to the hospital where you suffer from multiple broken bones, and a closed head injury plus a few other things. The doctors perform multiple cat scans, MRI's and x-rays to all parts of your body and you have to stay in the hospital for 2 weeks! ( That's ATLEAST an 80,000$ bill right there) If you have health insurance they'll only cover so much, so who's to pay the rest? Now since we are in a lawsuit crazy society you begin to think "I'm going to sue that drunk SOB that hit me. And I'll "make it rain" with all the settlement money I receive!" And here comes the reality check, there will be no "making it rain" the most you're getting is $25,000 because that's all he has on his policy. Remember the "policy limits"? Fair? Absolutely not. But life isn't fair.
Oh, but it can get worse! Let's say the drunk sob (a term of endearment, I know) hits 3 other people and they're all taken by ambulance to the hospital and suffer from broken bones etc.. The "50" in 25/50 means that with this accident "$50,000" is the most that can be paid out for medical expenses/damages to all parties involved. So now you may not even get 25K, you may get 10K depending on how they negotiate who was hurt the worst etc..
Uninsured Motorist/ Underinsured Motorist UM/UIM: By now you're pissed, this drunk SOB only has 25k in insurance for you and you may not even get that! You have atleast 80,000 in medical bills plus you'll need future care, you're out of work and you're bills are piling up so what do you do? You make sure you have UIM/UM coverage on your policy. UM = Uninsured Motorist This coverage will cover you if that drunk SOB had no insurance. UIM = Underinsured Motorist This coverage covers you in the event that the drunk sob has insurance but it is not sufficient enough to pay your bills! UM/UIM coverage can come in increments of 25/50, 50/100, 100/300, 250/500 500/1,000 (Yes One million). So let's say you took my advice and decided not to be cheap and got UIM/UM coverage of 100/300. Of if you're feeling extremely courageous 250/500K (Hey, a potential half a million dollar policy is kind of sexy, I don't care what anyone says). Now you're able to use your own policy to help get your bills paid. It sure beats filing bankruptcy because you could not pay your bills right?!
Medical Payments (MEDPAY): This is usually optional and not a lot of insurance companies will tell you about it. Medical payments coverage will pay any medical bill related to the accident up front. Let's say you have $10,000 in medical payments coverage, that would at least pay for the ambulance bill and some of the hospital bill. It's really helpful in a case where health insurance will not pay for things, and you do not have adequate savings to pay the bills up front. (It should not be used as a substitute for health insurance, always have health insurance!) Medical payments coverage is offered in different increments. The most I've seen is 100K in medpay, which is rare. But every little bit counts.
If you read this far, I hope this information was educational!
Full Coverage vs. Liability Only
Full Coverage covers you in the event of someone hitting your vehicle and its not your fault. Liability only covers you if you happen to cause an accident. Do not rely on the person that hits you to have insurance, protect yourself!!! It doesn't matter if you drive an '77 Pacer, or a 2008 Jaguar S-Type, get full coverage!
What Does Full Coverage Entail?
A full coverage policy should entail Liability Bodily Injuty, Uninsured Motorist, Underinsured Motorist and an optional medical payments coverage (BI/UM/UIM/ optional Medpay).
Bodily Injury (BI): A "policy limit" is the maximum one can get against your insurance. Now, I know its tempting as hell to be extremely cheap when picking out the policy limits, but this is not the time! Save your cheapness for irrelevant things like not buying the overpriced popcorn at the movie theater. Most states require drivers to have a minimum of "25/50K" per accident. The "25" is the maximum amount of money one person can get in an accident. So for example, let's say you're hit by a drunk driver (God forbid, but stuff happens) who was traveling 100 MPH, and rear ends you. Thankfully you survive! You're taken by the ambulance (approx 1,000$ trip) to the hospital where you suffer from multiple broken bones, and a closed head injury plus a few other things. The doctors perform multiple cat scans, MRI's and x-rays to all parts of your body and you have to stay in the hospital for 2 weeks! ( That's ATLEAST an 80,000$ bill right there) If you have health insurance they'll only cover so much, so who's to pay the rest? Now since we are in a lawsuit crazy society you begin to think "I'm going to sue that drunk SOB that hit me. And I'll "make it rain" with all the settlement money I receive!" And here comes the reality check, there will be no "making it rain" the most you're getting is $25,000 because that's all he has on his policy. Remember the "policy limits"? Fair? Absolutely not. But life isn't fair.
Oh, but it can get worse! Let's say the drunk sob (a term of endearment, I know) hits 3 other people and they're all taken by ambulance to the hospital and suffer from broken bones etc.. The "50" in 25/50 means that with this accident "$50,000" is the most that can be paid out for medical expenses/damages to all parties involved. So now you may not even get 25K, you may get 10K depending on how they negotiate who was hurt the worst etc..
Uninsured Motorist/ Underinsured Motorist UM/UIM: By now you're pissed, this drunk SOB only has 25k in insurance for you and you may not even get that! You have atleast 80,000 in medical bills plus you'll need future care, you're out of work and you're bills are piling up so what do you do? You make sure you have UIM/UM coverage on your policy. UM = Uninsured Motorist This coverage will cover you if that drunk SOB had no insurance. UIM = Underinsured Motorist This coverage covers you in the event that the drunk sob has insurance but it is not sufficient enough to pay your bills! UM/UIM coverage can come in increments of 25/50, 50/100, 100/300, 250/500 500/1,000 (Yes One million). So let's say you took my advice and decided not to be cheap and got UIM/UM coverage of 100/300. Of if you're feeling extremely courageous 250/500K (Hey, a potential half a million dollar policy is kind of sexy, I don't care what anyone says). Now you're able to use your own policy to help get your bills paid. It sure beats filing bankruptcy because you could not pay your bills right?!
Medical Payments (MEDPAY): This is usually optional and not a lot of insurance companies will tell you about it. Medical payments coverage will pay any medical bill related to the accident up front. Let's say you have $10,000 in medical payments coverage, that would at least pay for the ambulance bill and some of the hospital bill. It's really helpful in a case where health insurance will not pay for things, and you do not have adequate savings to pay the bills up front. (It should not be used as a substitute for health insurance, always have health insurance!) Medical payments coverage is offered in different increments. The most I've seen is 100K in medpay, which is rare. But every little bit counts.
If you read this far, I hope this information was educational!