From the title of this piece, you may have assumed it was an article or ad written by an insurance company. I assure you it is not. A client was in my office a couple of weeks ago, and was involved in a very serious automobile accident. He was shocked to find out that the person who was at fault only had insurance limits of $25,000. The client had over $25,000 in medical bills alone. I told him that all was not lost, we could make what is called an underinsured motorist's claim against his insurance company. He happily went home to get me his insurance information and eagerly awaited my review. Unfortunately for him, he too had $25,000 in liability and underinsured motorist coverage as well; meaning that his total recovery was limited to $25,000! He was in stunned disbelief as he had been assured that he was "fully insured". Technically speaking, he did have the full insurance requirements of Virginia, currently $25,000 per person bodily injury limits, with a maximum of $50,000 total; and $20,000 in property damage coverage. I quickly advised him that while he had full coverage, he was not adequately insured for his own good.
While this client was "fully insured" or had "full coverage" as I have heard insurance agents and adjusters say, to the extent that he caused an accident and bodily injury to a pedestrian or the other driver or his own passengers, his insurance would only pay up to $25,000 per person injured, with a limit of $50,000! Obviously, if he accidentally struck a pedestrian or fell asleep at the wheel and rolled his vehicle down an embankment, medical bills alone for the victims could surpass $25,000. Welcome to bankruptcy!
The bigger problem for him was the fact that his underinsured motorist coverage (limits of which cannot be written or obtained greater than your liability coverage limits in Virginia at least) were $25,0000/$50,000, so he had no available underinsured motorist coverage. Underinsured motorist coverage is a coverage that can cover you if you are involved in an accident with a person that does not have sufficient liability coverage to cover your injuries. In this case for example, if the client had $500,000/$1million underinsured motorist coverage, he would have had an additional $475,000 in coverage available to cover his own injuries, medical bills and pain and suffering. Worst of all, increasing your liability, uninsured and uninsured motorist coverages is not that expensive. In my opinion, I would not operate a car today without having at least $1million in liability, uninsured and underinsured motorist coverages. Given the price of today's automobiles, I would carry at least $100,000 in property damage coverage. If you were to cause an accident that totaled a tractor trailer, many tractors cost in excess of $100,000, this does not take into account the trailer or its cargo.
Do yourself a favor and call your insurance agent today!!!
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