The Smartest Way to Buy Auto Insurance

Buying Auto Insurance Part 4 of 4

Think About it: You Need to Buy Insurance to Protect Yourself, Passengers, and Family Members by Purchasing Underinsured Motorist Coverage (part 4 of 4)

One serious mistake is to decline UIM coverage. Some companies require that you purchase UIM in the same amounts as the liability insurance. However, many companies, depending upon state law, are authorized to sell denominations of UIM coverage less than the liability limits. The insured thinks that he is providing some satisfactory minimal coverage for his family and decides to save some money with lower UIM limits. However, UIM is probably the most important place to spend money.

You are not as likely to cause an accident, as you are to be a victim of an accident. At least if you are taking the time to read this article, you are probably a person who will exercise more care and judgment in your driving than the ordinary person. Therefore, it is more likely that you will be making a claim against another person for injuries sustained by you at the hand of the third party tortfeasor. In this instance, the tortfeasor may (but likely will not) have sufficient insurance to cover you and your passengers for all of your medical expenses, wages loss, and general damages. If not, then the tortfeasor is said to be “underinsured”. In that instance, the balance of the value of your claim, above the bodily injury policy limits of the tortfeasor, is the responsibility of your own company’s UIM coverage.

A third possibility is if the tortfeasor is uninsured. This is a distinct likelihood if someone who is reckless, or who has a drinking problem or who is driving with a suspended license involves you in their traffic habits. They caused you and your passengers harm, but they have no insurance. You will be making your entire claim under your UIM polity limits.

All too often, we have seen serious injuries to individuals and their families receive little or partial compensation because the insured elected to “save money” by not purchasing the maximum UIM coverage available to him. Purchase as much UIM coverage as you can.

Be Honest

A word of caution in dealing with your insurance company: don’t try to fool them on any of the information requested, or by insuring only one driver for each of the family vehicles. We have numerous cases holding that one family member is not covered because he or she was not named as a driver of another family vehicle. Questions of whether the vehicle was “available for the regular use” of any individual are complex issues, and history tells that you will lose. Disclose the full number of drivers and you will have the knowledge that you and family members are covered.

The same thing pertains to marital status and student status of children. Our recommendation is to be honest in your application and in your relationship with your company. The few dollars you “save” otherwise will never be a bargain should you loose out in the long run. A contract entered into with materially fraudulent representations can be voidable by the company under some circumstances.

Table of Insurance Coverage Requirements, by State

Most states require that you have liability insurance. This covers you when you're at fault in an accident. If you live in New Hampshire, South Carolina, Tennessee or Wisconsin, you aren't required by law (yet) to have liability coverage. For the rest of us, the mandatory coverage varies according to state. In the chart below, minimum liability limits are read as follows (in thousands of dollars): bodily injury liability for one person in an accident/bodily injury liability for all people injured in an accident/property damage liability for one accident.

So, for Alabama, the minimum requirements are $20,000 of bodily injury liability for one person, $40,000 bodily injury liability for all people and $10,000 property damage liability.

StateRequired coverage typesUninsured/Under-insured Motorist Coverage Required?Minimum liability limitsNo fault?

Alabama
bodily injury and property damage liability
No 20/40/10 no
Alaska
bodily injury and property damage liability
No 50/100/25 no
Arizona
bodily injury and property damage liability
No 15/30/10 no
Arkansas
bodily injury and property damage liability
No 25/50/25 no
California
bodily injury and property damage liability
No 15/30/5 no
Colorado
bodily injury and property damage liability
No 25/50/15 yes
Connecticut
bodily injury and property damage liability,
uninsured motorist Yes 20/40/10 no
Delaware
bodily injury and property damage liability,
personal injury protection No 15/30/10 no
DC
bodily injury and property damage liability,
uninsured motorist Yes 25/50/10 yes
Florida
BI liability not required, only property damage liability,
personal injury protection No 10/20/10 yes
Georgia
bodily injury and property damage liability
No 25/50/25 no
Hawaii
bodily injury and property damage liability,
personal injury protection No 20/40/10 yes
Idaho
bodily injury and property damage liability
No 25/50/15 no
Illinois
bodily injury and property damage liability,
uninsured motorist Yes 20/40/15 no
Indiana
bodily injury and property damage liability
No 25/50/10 no
Iowa
bodily injury and property damage liability
No 20/40/15 no
Kansas
bodily injury and property damage liability,
personal injury protection Yes 25/50/10 yes
Kentucky
bodily injury and property damage liability,
personal injury protectionNo 25/50/10 yes
Louisiana
bodily injury and property damage liability
No 10/20/10 no
Maine
bodily injury and property damage liability,
uninsured motorist Yes 50/100/25 no
Maryland
bodily injury and property damage liability,
uninsured and underinsured motorist Yes 20/40/15 no
Massachusetts
bodily injury and property damage liability,
personal injury protection, uninsured motorist Yes 20/40/5 yes
Michigan
bodily injury and property damage liability,
personal injury protection No20/40/10 yes
Minnesota
bodily injury and property damage liability,
personal injury protection, uninsured and underinsured motorist
Yes 30/60/10 yes
Mississippi
bodily injury and property damage liability
No 10/20/5 no
Missouri
bodily injury and property damage liability,
uninsured motorist Yes 25/50/10 no
Montana
bodily injury and property damage liability
No 25/50/10 no
Nebraska
bodily injury and property damage liability,
uninsured and underinsured motorist No 25/50/25 no
Nevada
bodily injury and property damage liability
No 15/30/10 no
New Hampshire
Insurance not required; proof of financial responsibility,
medical payments, uninsured motorist Yes 25/50/25 no
New Jersey
bodily injury and property damage liability,
personal injury protection, uninsured motorist No 15/30/5 yes
New Mexico
bodily injury and property damage liability
No 25/50/10 no
New York
bodily injury and property damage liability,
uninsured motorist, personal injury protection Yes 25/50/10 yes
North Carolina
bodily injury and property damage liability
No 30/60/25 no
North Dakota
bodily injury and property damage liability,
personal injury protection, uninsured and underinsured motorist
Yes 25/50/25 yes
Ohio
bodily injury and property damage liability
No 12.5/25/7.5 no
Oklahoma
bodily injury and property damage liability
No 10/20/10 no
Oregon
bodily injury and property damage liability,
personal injury protection, uninsured and underinsured motorist
Yes 25/50/10 no
Pennsylvania
bodily injury and property damage liability,
medical payments No 15/30/5 yes
Rhode Island
bodily injury and property damage liability
Yes 25/50/25 no
South Carolina
bodily injury and property damage liability,
uninsured motorist Yes 15/30/10 no
South Dakota
bodily injury and property damage liability,
uninsured motorist Yes 25/50/25 no
Tennessee
Insurance not required; proof of financial responsibility
No 25/50/10 no
Texas
bodily injury and property damage liability
No 20/40/15 no
Utah
bodily injury and property damage liability,
personal injury protection, uninsured and underinsured motorist
No 25/50/15 yes
Vermont
bodily injury and property damage liability
, uninsured motorist Yes 25/50/10 no
Virginia
bodily injury and property damage liability
, uninsured and underinsured motorist Yes 25/50/20 no
Washington
bodily injury and property damage liability
No 25/50/10 no
West Virginia
bodily injury and property damage liability
, uninsured motorist Yes 20/40/10 no
Wisconsin
Insurance not required; proof of financial responsibility,
uninsured motorist Yes 25/50/10 no
Wyoming
bodily injury and property damage liability
No 25/50/20 no

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About the Author

Jeanine Steele is an editor with SettlementCentral.Com (http://www.settlementcentral.com), the online resource for self-help do-it-yourself personal injury claims.

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