Protect Yourself and Your Family from the Financial Consequences of Inadequate Coverage
Insurance companies have a reputation for what is commonly called a strategy of “delay, deny, defend”, a phrase made popular a decade ago by a book of the same name. Most insurance companies are worried about their bottom line and will make every effort to avoid paying claims. As an attorney who has helped people who have been seriously injured in car, truck, motorcycle and bicycle accidents for over two decades, I’ve seen my share of insurance company tactics, so I am cynical about the insurance industry. We are, however, required by law to have motor vehicle insurance and it’s important to have the right insurance to protect you and your family.
Many people don’t really know what they have for auto insurance coverage or fully understand what it covers. It is important to understand what coverage you have and what coverage you should have in the event of an accident. I’m not advocating raising your premiums, but small adjustments now could better protect you if you are seriously injured in an accident.
A Life-Changing Accident
None of us thinks we’ll be in a devastating accident, but they happen all-too-frequently.
Imagine that you’re out riding your motorcycle on a gorgeous, sunny spring day. You are just two blocks from home. The traffic ahead of you stops because a dog runs into the roadway ahead. You stop as well, but there is a large pick-up truck approaching from behind you. The driver is drunk, the truck strikes you from behind. You are pinned under the truck and dragged for a distance.
You are taken to a local hospital and later med-flighted to Boston. You have suffered catastrophic injuries to both of your legs. You remain hospitalized for three months, unable to work. After several more months, multiple surgeries and time in a rehab hospital you are sent home, but both of your legs have suffered permanent damage. Your life will never be the same again.
Then there is the financial damage. Your medical bills are over a half a million dollars and will continue to accumulate for years to come. But you have insurance, right? Unfortunately, you discover that the driver who hit you only carried the state’s minimum coverage of $20,000. Then you find out that you do not have any additional insurance to help compensate you for your devastating loss.
This is not just a hypothetical scenario, it happened to one of our clients. No amount of money could make up for what happened to her as a result of the accident, but better insurance coverage could have made her life easier.
Do You Have Adequate Insurance Coverage?
Many people do not know about all of the types of insurance that will protect you and your family should you find yourself the victim of a tragic motor vehicle accident.
- Medical Payments Coverage
Known as Med Pay, this is optional coverage you can add to your current insurance policy. Med Pay is similar to the Personal Injury Protection (PIP) coverage that you are required to carry on your insurance policy. Med Pay is an important benefit because it pays for medical expenses incurred as the result of an accident, regardless of who is at fault. A typical Med Pay policy will cover $5,000 -10,000 worth of coverage per person and costs $20 or less per year on your insurance policy. You can get Med Pay coverage in higher amounts, but $5,000 -10,000 is typical. The benefit of adding Med Pay to your insurance coverage is that if you are to receive a settlement, Med Pay coverage will allow you to keep more of it.
When you are in an accident, your private health insurance (Blue Cross & Blue Shield, Tufts, Harvard , etc.) often pays a portion of your medical bills if you are injured. When the private insurers make these payments, they are entitled to be reimbursed out of your settlement proceeds. They make sure this happens by putting a lien on your case. When they do this, the law requires us to reimburse them for the medical expenses they have paid. In addition, public health insurance like Medicare and Mass Health are also required by law to be reimbursed. If you have Med Pay to cover some of your medical expenses, your health insurance will pay less and therefore need to be reimbursed for fewer expenses, which means you will keep more of your settlement. In addition, the benefits you receive from the Med Pay portion of your insurance policy do not have to be reimbursed to your automobile insurance company. Simply put, Med Pay allows you to keep more of your settlement money in your pocket.
- Uninsured/Underinsured Auto Coverage
This type of insurance, often referred to as “U” coverage protects you, members of your household, and passengers in your car for injuries caused by a driver who has no insurance or who has inadequate insurance. It covers injuries sustained in a hit and run accident, as well. “U” coverage also protects you and your household members from injuries as a pedestrian or as a passenger in a vehicle you do not own.
“U” coverage is on your insurance policy. Once you have exhausted the benefits available from the insurance company of the driver who caused your injuries, you then can access the “U” coverage through your own insurance policy to cover additional expenses and damages you incurred as a result of the accident. Your auto insurance company cannot penalize you or surcharge you for accessing this coverage. Further, you are not required to reimburse your health insurance company for any medical benefits paid by them out of any settlement received through “U” coverage. This will allow you to retain more of any settlement you receive.
Like Med Pay, this additional “U” coverage is affordable. We typically encourage people to carry at least $100,000/$300,000 (per person/per accident) in “U” coverage. For a small amount more annually, you can increase your coverage to $250,000/$500,000.
The cost of “U” coverage varies based on the amount of coverage you seek, your driving history, the type of vehicle you drive, the age of the driver and the city in which you live. But for most people the additional coverage can cost as little as $30-$50 per year.
Finding yourself the victim in a horrible accident is hard enough on the mind, body and spirit without having to face financial devastation because you were injured by a driver without insurance adequate to compensate you for your injuries. These small and relatively inexpensive tweaks to your current motor vehicle insurance policy can reduce the financial toll of a devastating accident.
The Economy and Insurance
There is always a small percentage of drivers on the road with inadequate or even no insurance. While being uninsured is illegal, sometimes these drivers fly under the radar and manage to stay on the road. The number of these drivers increases in difficult economic times. When unemployment rises, people are faced with tough choices. Some may choose to reduce insurance coverage to the minimum required under the law, while others may let insurance coverage lapse altogether. This puts every driver at risk. The incremental premium additions of Med Pay and “U” coverage to your own auto insurance policy can give you some peace of mind that you will have adequate coverage in case of an accident.
Have a Policy Review
Accidents happen. Make it a point to have your automobile insurance coverage reviewed by a reputable insurance agent. Armed with the knowledge of Med Pay and “U” coverage, you can discuss adding these options to your insurance policy. At Contant Law, we’re happy to recommend an insurance agent should you need one. Don’t hesitate to contact us. We’re here to help.
We’re here to answer your questions and help you throughout the process
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