If you're in the market for a new insurance policy or just reevaluating your existing policy, here's one tip that won't cost you much money but may end up saving your future. When you buy an insurance policy, you're mostly hedging against your own mistakes.
The bulk of your coverage is intended to pay for the damages you owe in the event of an accident. For example, if you rear end another car, your property damage coverage will cover the damages to the other person's car up to the limits of the policy.
If the driver of the other car or their passengers are injured, you will have some bodily injury coverage for their medical bills. Of course, you may carry collision coverage to recoup the damages to your own car regardless of fault.
In some cases, you may also carry the elective medical payments coverage to recoup part of the money you lose paying your own medical bills regardless of fault.
There are other coverages, such as comprehensive coverage, that are geared toward covering damage to your vehicle in the event of natural disasters, theft, and a few other odds and ends.
So, while none of the aforementioned coverage is by any means unimportant, there is one coverage that is intended for you that, in the event of a serious accident, could be your saving grace or your biggest regret. That coverage is called uninsured/underinsured motorist coverage.Let's say someone is driving through an intersection and a car going 30 mph over the speed limit comes flying through a red light and t-bones the hapless victim. That's probably going to be a very serious accident.
Let's say that the victim was badly injured with long hospital stays, multiple surgeries, and lots of rehab required as a result of the accident. The liable driver's insurance quickly coughs up its limits, which happens to be the Virginia state minimum of $25K. Unfortunately, $25K isn't even remotely close to covering hundreds of thousands of dollars in medical bills and pain and suffering.
If our victim is carrying the Virginia state minimum limits of uninsured/underinsured motorist coverage, they won't see any other money than the $25K that the other driver's insurance paid out.
The only other option is going after the assets of the other driver. The problem with pursuing the assets of the other driver is that, more often than not, there isn't much to be had. After all, that driver had the state minimums.
Courts can be reluctant to take a house away from a family, too, so don't expect much from that end. That's a true disaster. A victim's life is now permanently altered, physically and financially, due to no fault of their own.
The saving grace in this situation would be high uninsured/underinsured motorist coverage limits. In that situation, the victim's policy would step in and make up part or all of the difference between the other driver's policy limits and the medical bills accrued from the accident.
We recommend that you carry $1 million in uninsured/underinsured motorist coverage.The monthly premiums are surprisingly affordable and worth every penny should you be in a catastrophic accident.