A Lawyer’s Guide to Automobile Insurance

Introduction:
This purpose of this guide is to help you, when purchasing auto insurance, to select the coverage that will best protect you and your family if you are ever involved in an auto accident. It is not to be considered legal advice and each individual auto insurance policy must be tailored to your specific financial position. If you have any questions left unanswered by this pamphlet or would like a lawyer’s opinion about your auto insurance policy, call Kamensky - Cohen & Associates for a free consultation.

Liability:
What does the "Liability" on my policy cover and how much should I be carrying?
Liability insurance is what protects your family and assets in the event you are charged with causing an accident. High liability protection can help assure you will not be financially stripped. By law, you are required to carry at least 15/30, or $15,000 for one person, up to $30,000 for more than one person injured in an auto accident for which you are charged as responsible. While this coverage pays the other driver for injuries he/she sustains, your concern is the protection it affords your assets from being claimed by the injured party. For example, if you only carry the minimum 15/30 coverage, and the injuries to the other party are judged at being valued at $100,000, you can be personally responsible for the amount greater than your insurance coverage...or $85,000! If you carry $100,000 liability coverage, your insurance company will pay the full $100,000 to the injured party and your assets will not be touched.

Coverage:
How much should you buy? The best answer is as much as you can afford. Ideally, no less that $100,000. It is not uncommon for juries to award in excess of the minimum coverage for serious injuries. Increasing your coverage to $500,000 or $1,000,000 can make good sense if you own property, have savings, and other assets that you need to protect. The good news is that the cost of incremental increases of liability coverage is far less than you would expect. The highest premium is for the first $50,000 in coverage because most awards for accident related injuries are in that range. Get the exact costs for each level of liability coverage from your broker or insurance company and then opt for the most you can afford.

UM / UIM: 
What does Uninsured Motorist (UM) & Under Insured Motorist (UIM) Cover?
This coverage is critical! UM/UIM coverage protects you when you are the injured party and not responsible for the accident, but the person who is, either does not have auto insurance, or has insufficient coverage to pay for your injuries. Since their policy will not sufficiently cover what your damages are "worth", your own auto insurance will make up the difference up to the amount of your UM/UIM coverage. While UM and UIM coverage is not required and can be waived to reduce your premium costs, we strongly recommend that you have this coverage to protect you and your family. For instance, If you have a $100,000 UIM/UM coverage on your auto policy and are hit by someone and your damages due to injuries and economic losses add up to $100,000, and the "other guy" has no liability insurance and no assets, your own UM/UIM coverage will cover your $100,000 in losses.

How much to buy:
We suggest you carry as much UM/UIM coverage as you can comfortably afford to make sure that you are protected no matter what the "other guy’s" economic or insurance status. Again, we recommend no less than $100,000. You would be surprised at how many drivers on the road have little or no liability insurance.

Stacking: 
An option to consider when buying UM/UIM coverage is "stacking". Ask your broker or agent to explain this term more fully, but in short, this allows you to accumulate the amount of the coverage available if you insure more than one automobile on your policy. For example, if you insure two cars with UM coverage at $50,000 each and you are hit by an uninsured motorist, even though only one of your cars was involved, you may "stack" the two coverages and collect up to $100,000 in damages from your own insurance.

Limited & Full Tort:
What is the difference between "Limited Tort" and "Full Tort" protection?
These terms all refer to "tort options" or differing rights to sue for non-economic damages in the event that you are injured in an auto accident. If you select "Full Tort" for your coverage, you are permitted to sue the party responsible for the accident for damages caused by any injuries resulting in pain and suffering, loss of quality of life, etc.

Limited Tort Explained:
If you select "Limited Tort" it is quite a different story. By making this selection, The choice of "limited" will bar you from suing the responsible party or your pain and suffering unless those injuries are determined "serious". The definition of "serious" is "death, serious impairment of bodily function or permanent serious disfigurement." The requirements to fulfill that definition are very specific and difficult to meet. If your injuries do not meet the threshold, you will not be entitled to sue for any pain and suffering you may have endured as a result of an auto accident even though you are not the person responsible for that accident. Also, remember that choosing this option means the same restrictions will apply to all others in the household covered by this policy.

The best option:
Without a right to access the court system in the event of an injury that does not meet certain legal definitions, even a prolonged injury will not be compensated. You might be tempted to give up this right in exchange for a large reduction in insurance premiums. Weigh whether the cost savings offered is worth giving up your or your family’s ability to be fairly compensated in the event of an accident. We highly recommend "Full Tort" coverage. Your insurance company and/or broker often encourage you to purchase "Limited Tort" because, they will point out, it is cheaper. Again, be sure you are aware that when you choose to save money on this coverage, you may be locking yourself out of the right to sue for injuries that may forever alter the quality of your life. Be sure you ask the exact difference in cost between the "Full" and "Limited" Tort. It may be no more than $100-225 a year per car. Too often we have had to tell people who are suffering significant pain and discomfort as the result of an auto accident that they have no case because they have "Limited" Tort coverage on their auto policy and their injuries do not meet the requirements that would allow them to sue for pain and/or suffering.

"First Party" benefits:
These are the coverages you receive from your auto insurance carrier without regard to whose fault the accident is. If you are involved in an auto accident, even if you are not in your own car, your insurance company is required by law to pay for some of the expenses you will most certainly incur as the result of an auto accident injury.

Basic First Party:
Basic First Party coverage includes medical expenses for treatment of injuries related to the accident up to $5,000 with no deductible. After $5,000 your health insurance will "kick in". Additional medical coverage benefits can be purchased up to $100,000 which may be important if your health insurance is inadequate or if you are a member of an HMO requiring referrals from your doctor.

Other optional First Party benefits that can be purchased are income loss protection which can be important if you do not have disability benefits through your employer or if you are self employed; accidental death benefit; and funeral benefit. Ask your agent or broker about costs and coverages.

Saveing Money on Collision and Comprehensive:
The short answer is yes! These coverages are for damages to your car (including theft, fire, etc.) That are not the result of someone else’s negligence. Your insurance company pays you the cost of repair or replacement less the amount of the deductible you have chosen. The lower your deductible, the higher your premium. You may think you are playing it safe by selecting a low deductible because the insurance company pays more when you make a claim. However, if you were to file a claim every time you had a $500 dent in your car, your premiums would sky-rocket and/or your policy would be canceled. We advise that you increase your deductible to as high as you think you are financially able to absorb the cost of your own occasional damages. The money you save on this option can be applied to better coverages for protection against bodily injury and serious economic losses due to injury. What you save on Collision & Comprehensive can go towards providing you with "Full Tort" coverage. This is a smart transfer of costs if protecting your and your family’s health and financial security in the event of an accident is your goal.

General Rules of Thumb:

• Ask several insurance companies and/or agents to cost out your policy choices before you buy auto insurance. Ask each of them for more than one quote, showing the costs for the different options you would like to evaluate. Make this request in writing. 
• Do not think that the "cheapest" is always the best way to go. People are often surprised and disappointed at how little their coverage offer them when they find themselves a victim of an auto accident. 
• If you are ever injured in an auto accident, do not rely on your insurance company’s claims adjuster to have your best interests at heart. Let decisions about your medical treatment be determined by you and your doctors, not by your insurance adjuster or the insurance company’s doctor. Remember, they tell you they are there to protect you but their real purpose is to make money! 
• If you are ever in an auto accident in which you or any member of your family is injured, always consult a lawyer specializing in auto injury accidents. We, of course, suggest you call Kamensky - Cohen & Associates! Our attorneys have been practicing law in the Pennsylvania courts for over 25 years. And, along with a focus on Personal Injury Law...at Kamensky - Cohen & Associates, we specialize in people!

One last word:
You purchase auto insurance for safety and security, not just to comply with the law. Please take our advice, when you talk to your insurance agent or broker tell them you want coverage that protects you in case of an injury auto accident. You want an auto insurance policy that reflects your real needs...both for today and the future, one that will protect you and your family.

If you need guidance, Kamensky - Cohen & Associates will gladly answer any questions and offer advice tailored to your particular needs. Please call us or e-mail your questions.

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