In the state of New Jersey, anyone who operates a motor vehicle is required to carry automobile insurance. But the truth is that not everyone abides by the law and you may find yourself involved in an accident with someone who is uninsured.
Even more common, you may find yourself involved in an accident with another perfectly law-abiding citizen who does have insurance – but is underinsured.
In either of these scenarios it’s important to understand the repercussions and what you can do. Don’t rely on someone else to do the right thing. Here’s what you need to know to protect yourself.
Types Of Coverage
You can obtain automobile coverage for four main areas:
- Damage to your car and the car of the person who is involved in a crash with you
- Your medical bills (PIP coverage)
- Injuries you caused to others (bodily injury coverage)
- Protection from uninsured or underinsured motorists who harm you or your vehicle
It’s the last one that we want to focus on because insurance is only as good as its ability to cover you in the event of a crisis.
Unfortunately, many drivers are not even aware that they are underinsured. Automobile insurers often give you minimum coverage for underinsured drivers. It’s a standard policy that many people don’t think to question.
Where It Goes Wrong
If you are injured by someone who has only the minimum amount of coverage (which is $15,000) you will only be able to recover up to the limits of your own policy.
Let’s use an example to show the large gaps this can leave in your coverage. Let’s say you’re in an accident that leaves you unable to return to work. You expect that to cost $150,000 in lost wages.
Now let’s assume that the person involved in the accident with you is underinsured – meaning they only have the minimum coverage of $15,000.
If you’re carrying the typical $50,000 in coverage, you’ll only be covered for up to $35,000 from your own policy (the balance of the $50,000 will come from the other driver’s policy – remember, that driver is covering $15,000.)
As you can see that’s a pretty big gap between what insurance will cover and what you need to subsist after the accident.
Now let’s flip this around and assume you have half a million dollars in coverage. In that scenario, you’ll get $15,000 from the other driver’s policy and $135,000 from yours (to cover your full lost wages.)
You Can Sue… But It May Not Yield A Better Result
If you’re involved in an accident with an uninsured motorist, your inclination may be to sue. You can certainly do that, and you may even win a judgment, sometimes for the full amount of your injuries. But practically speaking, you’re not likely to get any money, since the driver may not have enough to cover your medical expenses anyway.
And keep in mind that a judgment is not a payout. The other driver may have trouble buying a house or getting a new credit card with a judgment against them but otherwise they may never – or never be able to – pay your expenses.
There’s no reason to worry about this happening if you carry enough insurance to protect yourself.
A Better Policy
You must be protected from the uninsured and those who only have minimum coverage, and for better or worse the responsibility falls on you. You should be covered for at least $100,000 per person for injuries caused by people who have no insurance or who have coverage less than $100,000.
In addition, your regular bodily injury coverage should typically match this amount.
These minimums give you affordable insurance with coverage for some of the most common injuries, including herniated discs and broken bones.
Yes, we said “affordable” insurance. It’s a common myth that more coverage equals expensive insurance. You might be surprised to learn that the premium difference between “bare minimum” insurance and a decent policy that can cover you in many cases is typically only a few dollars. In the grand scheme of things, a minimal increase in insurance costs can mitigate huge expenses later.
Buyer Beware: Getting Your Policy Online Can Be A Mistake
Some insurance vendors let you enter your basic coverage needs and apply for a policy online. But most people who go this route are not aware of the repercussions of being underinsured. Most often, people are looking for the lowest priced insurance.
And even though this can save you a couple of bucks in the short term, it’s not likely to protect you when you need it to. The savings rarely outweigh the risks.
Even if you have an insurance agent, you may still be carrying minimum coverage without understanding why this may not be the best idea for you.
Underinsured coverage is protection for you and your family. If you’re not sure whether you’re covered adequately, contact your insurer and find out. A $50 increase in your premium may save you thousands if you’re in an accident.
When To Call Your Attorney
If you find yourself involved in an accident where either you or the other driver was underinsured, it may be time to get legal counsel. Your attorney can help you figure out exactly what the limits of your coverage are and present the claim to both insurance companies.
There are a series of legal steps your attorney can help guide you through, beginning with arbitration. In New Jersey, where insurance companies are allowed to reject arbitration, you may find yourself going directly to a lawsuit.
Either way, take care of your personal well being first. Go to the hospital or to your doctor immediately. Sometimes, injuries don’t manifest for a few days or weeks. Be mindful of how you feel following an accident and if you notice anything awry or experience pain, visit your doctor as soon as you can.
The best time to call your attorney is following a doctor’s diagnosis and prior to speaking with your insurance company. Your instinct may be to contact the insurance company immediately but should there be legal action it’s best that you don’t give them a statement that could be used to deny insurance later. Sometimes, something as simple as answering a question about your condition with, “I’m fine,” can come back to haunt you.
However, in a case where you don’t experience symptoms for your injuries right away, you can still contact an attorney, typically up to six months after an accident.
Don’t wait too long or there’s less and less likelihood of being able to tie symptoms back to your accident.
If you’ve been in an accident with an uninsured or underinsured motorist, contact us and let’s talk about what we can do to help. We’ll evaluate your situation and let you know what your options are.