Auto Insurance, Part II

What do your premiums get you?

It is important that when you purchase auto insurance that you have a discussion with your agent about uninsured motorist coverage, underinsured motorist coverage and liability coverage.

What does all this mean?

Uninsured motorist coverage protects you if someone causes an accident who is uninsured.

Underinsured motorist coverage protects you if someone who causes an accident, has insurance, but is underinsured. The statutory minimum is a 20/40 policy. Clearly, $20,000 is not a lot of money, today. The minimum has never been updated since the 1970’s. As a result you can purchase underinsured motorist coverage with a larger maximum in order to protect you and your family if you were seriously injured in an auto accident to cover your pain and suffering, loss of abilities, loss of social enjoyments, loss of activities, you once engaged in, in excess of the tortfeasor’s policy.

You should know if you have these types of coverages. Adding these coverages is usually relatively inexpensive.

You should also know what your liability limits are as well. Liability limits cover you if you unfortunately cause an accident and hurt someone else. The higher the liability limits the less likely you will be subject to personal exposure if you hurt someone and the value of their injuries exceed your policy limits.

Talk to your agent. Knowing what you are paying for will greatly reduce your stress, if and when you are involved in an accident. After an accident occurs is not the time to find out what kind of coverage you have. It can and will protect you, so get informed. Information is strength and will help you be better prepared, if and when the time comes.