As a practicing injury accident attorney, I get the pleasure
of having to deal with insurance companies on a daily basis. Insurance
companies are essential but if you do not understand the relationship between
the insurance company and yourself, you could find yourself in trouble later on.
Almost every client we retain lack knowledge on what is specifically
in their insurance policies. They do not know what their bodily injury policy
limits are. Or whether they have rental coverage. Some do not even know what
medical payment coverage is or uninsured motorist coverage for that matter. It
is a problem because it can leave you having to pay for expenses out of pocket
that could have been avoided.
Let's discuss insurance policies so that my readers can be
prepared, and financially secure in the event of an accident.
WHAT IS INSURANCE?
First, what is insurance? Insurance spreads risk among a
number of parties. You purchase a contract with a premium, to cover you in the
event of an occurrence. That occurrence could be as simple as a rear-ender or
as devastating as multi-vehicle collision resulting in death. The pooled risk,
held by the big insurer, pays for the liability of the negligent party, and in
some cases, the defense fees in litigation. Thus, the insurance contract
transfers risk. You pay the premium so that if something bad does happen --
namely, an accident that you were at fault for -- you do not have to go
bankrupt.
BASIC PROVISIONS
Second, automobile insurance policies have different levels
of "protection." The insured gets the choice of paying a higher premium
to obtain more beneficial provisions. Thus, if there is an unfortunate vehicle
accident, the insured gets more security, i.e. does not have to pay out of
pocket for a rental, does not have to pay out of pocket for medical treatment when
liability is in dispute, and so on.
You should be familiar with some of the most basic
provisions. One, you should know your bodily injury limits. A policy limit is
the monetary limit at which the insurance company will pay for that specific
liability. For example, a person with a $50,000 bodily injury limit will not
have to pay anything out of pocket if the damages to the injured party do not
exceed $50,000. However, if it was a catastrophic injury, the person's assets
could be in jeopardy. Therefore, you should consider whether a higher limit
makes sense for your particular circumstances.
Two, you should know whether you have rental coverage and
medical payments coverage. Rental coverage means that your rental will be paid
for while you vehicle is being repaired regardless of fault. Most individuals do
not know that their property damage coverage may not extend to the rental. Medical
payments coverage, similar to rental, will cover medical treatment up to a
certain limit, regardless of fault. Thus, if you need to be transferred to the
hospital immediately and undergo emergency treatment, the bills will be paid
for by this provision -- even if it is questionable whether you were the cause
of the accident.
Three, you should be aware of your uninsured motorist
coverage. In California, you have to specifically sign and waive this provision
if you do not want it. Uninsured motorist coverage will pay for your medical
treatment and bills if the negligent party does not have insurance of his or
her own. It's wise to purchase uninsured motorist coverage, because you should
always protect yourself first -- and you cannot expect for everyone to abide to
the law of the land.
QUESTIONS?
If you are unfamiliar with certain provisions in your insurance policy, you should contact a personal injury attorney. Lawyers in this field have the experience and knowledge on how to advise individuals appropriately. Finally, remember that knowledge is power -- and in this area, it could mean savings too.