Review of Car Insurance Coverage For Uninsured and Under-Insured Motorists in the US

Car insurance coverage comparison is becoming very popular in USA. The economic downturn is bringing about unexpected changes in most walks of life and insurance is one of them. As per the Insurance Information Institute one driver out of every seven in the US is believed to have no automobile insurance. This would mean that 14% of the drivers are uninsured and only 86% drivers are insured. The drivers who are going for insurance have to face broad repercussions which arise out of uninsured motorist coverage. Car insurance comparison becomes very important for those who are taking insurance to verify whether they have taken the uninsured motorist and under insured motorist.

The uninsured motorist and under-insured motorist insurance is separate, although in many states they can or must be purchased together. They are also better known in abbreviated form as UM or UIM. It is natural that you would not think about or know exactly what the uninsured or under insured motorist indemnity is, unless you fall into such a situation. If you have opted for uninsured motorist than this will pay you for any loss or damage you may incur when you have a hit-and – run accident or when you collide with an uninsured motorist. A motorist can be uninsured when he has no insurance coverage, or whose claim the insurance company denied or was not able to financially meet with the obligations of loss. The uninsured motorist indemnity will also protect you if you are hit by a car as a pedestrian.

The under-insured motorist coverage pays you for any loss or damage when the motorist with whom you have collided is under-insured. The motorist in this case is insured but his limits of insurance are lower than the actual loss you have sustained. These coverages will pay you and your passengers for any bodily injuries are caused when the under-insured motorist or uninsured motorist is legally liable for this. In certain states the coverage for property damage is also paid under this coverage. Both these insurance pay you for your medical bills, reimburse for the lost wages if you miss work and you can also seek redress for pain and suffering resulting from the crash.

In 12 states the no fault insurance laws are prevalent. The no-fault insurance coverage is very similar to the uninsured motorist coverage. No-fault coverage gives certain compensation when you are not at fault and the driver at fault is uninsured. You can collect the benefits from your own insurance companies. Nevertheless, in the states where no-fault law prevails, going for uninsured motorist coverage is cost effective and beneficial since it provides an additional layer of financial support. Accidents can turn out to be more ghastly or long lasting than what they seem at first.

Only five of the states that insist their drivers carry Uninsured Motorist also mandate the purchase of this coverage; they are: Connecticut, Maine, Minnesota, North Carolina and Vermont. If you live in any state other than those that have compulsory coverage, a prudent person like you should go for car insurance coverage and buy under-insured and uninsured motorist coverage. The cost for this car insurance coverage of uninsured motorist is quite nominal. This is a very positive factor to consider when taking this coverage. With a little extra cost you can save yourself from any financial problems at a later date. In these economic times if would serve you since many drivers are either uninsured or under-insured.

You should compare car insurance coverage and if you do not have this coverage you can seek to take this coverage. Compare car insurance quote for the best coverage and rates. It always pays you to be alert and make informed decisions when it comes to car insurance.

Do You Have Sufficient Auto Insurance Coverage?

Imagine getting ready to leave your house and you open your door and the rain is pouring down. Now you start to frantically look for your umbrella…. ah, there it is! You step outside, open your umbrella, and you are now protected from that pouring rain. If it were a bright sunny day with no rain in sight you probably would not even care about where your umbrella is or if you even had one! The same is true about insurance. Until you need it, do you really care about it? Unfortunately, too many people realize that they have insufficient coverage only when an unexpected incident occurs and they have to place a claim with their insurance company.

So, a logical starting point to determine if you have proper insurance coverage is to understand the basics. To ensure that you do have the proper coverage, you first need to acquire a good understanding of the basics of auto, home, personal umbrella, and life insurance coverage. For this article, we will focus on auto insurance coverage.

Auto Insurance basically covers you for liability and property damage as it relates to your motor vehicle. There are other optional areas of coverage as well, but for our discussion let’s stay focused on the basics, which are the most important anyway. Your auto insurance policy’s first and/or second pages are the declaration pages of your auto insurance policy. The declarations pages describe your auto coverage limits in numeric dollar values.

Here is a sample of what you may see on your auto insurance policy’s declaration pages:

-Bodily Injury/Property (BIPD) 250/500/100
-Limited or Unlimited
-Medical (Med) $5,000
-Personal Injury Protection (PIP) 250 w/250 Ded
-Uninsured/Underinsured (UM/UIM) 250/500/100
-Collision $500 (Coll) Deductible
-Comprehensive (Comp) $500 Deductible
-Rental Insurance (RI) 80%/1500

Let’s take a look at each of these coverage definitions and amounts in more detail.

The BIPD represents Bodily Injury (BI) / Property Damage (PD). Basically, in the example above, this individual policyholder has liability protection for $250,000 per individual or $500,000 maximum per incident, plus $100,000 in property damage to the other party’s vehicle in a collision. Liability coverage is protection for times when you have been deemed and proven negligent in an auto accident and you therefore become legally liable for the resulting compensatory and/or punitive damages to the other party or parties. The BI, of the BIPD, will cover you for negligence on your part that resulted in bodily injury to the other party or parties. BI also covers the cost of attorney fees associated with any litigation brought against you by the other party. In the above example, this person has $250,000 in coverage for all inclusive liability and attorney fees per individual injured or $500,000 for the entire incident.

The PD, of the BIPD, covers the damage to the other party’s vehicle as a result of your negligence; thus, in the above example, up to $100,000 in property damage to the other party’s vehicle or property. Now, being cognizant of the litigious society that we live in, we ask if $250,000 per person or $500,000 per incident is enough BI coverage? This is a personal decision for every individual to make depending upon their current assets and net worth, and their knowledge of recent jury decisions and awards on BI cases. A major factor affecting this decision is an understanding that you are self-insured for any amounts awarded in excess of your BI coverage amount, should the jury award compensatory and punitive damages greater than your BI coverage amount. So, in this example, should the jury award $750,000 to the individual driving the other vehicle who suffered bodily injury because you collided with them as a result of your negligence, then you are self-insured for the amount in excess of $250,000 which in this case would be $500,000. If you do not have the $500,000 to settle the award, then the judge has many other options to ensure restitution to the injured party such as: garnishing your wages, selling off some of your assets, placing a lien on your property, etc. Now, you can get an umbrella policy to cover you up to a certain amount in excess of your underlying auto BI coverage. We will look at how an umbrella policy works in more detail in an upcoming article.

Next, we have “limited right to sue” versus “unlimited right to sue” coverage. Basically, under the “limited” right to sue lawsuit option, you agree not to sue the person who caused the auto accident for your pain and suffering unless you sustain one of the permanent injuries listed below:

-Loss of body part
-Significant disfigurement or scarring
-A displaced fracture
-Loss of a fetus
-Permanent injury
-Death

Please note that choosing this option does not waive your right to sue for economic damages such as medical expenses and lost wages.

Under the “Unlimited” right to sue lawsuit option, you retain the right to sue the person who caused an auto accident for pain and suffering for any injury. Most people will choose the “limited” option because it is far less costly and it provides the ability to sue the negligent party for most major and permanent injuries. However, many attorneys will usually choose the “unlimited option” for their own personal coverage and pay the significant extra cost because they want the right to sue for any injury.

PIP coverage stands for Personal Injury Protection coverage. PIP is paid from your own policy. PIP covers medical expenses, and possibly lost wages and other damages. PIP is sometimes referred to as “no-fault” coverage, because the statutes that enacted it are generally known as no-fault laws. PIP is designed to be paid without regard to “fault,” or more properly, without regard to legal liability. PIP is also called “no-fault” because, by definition, a claimant’s, or insured’s, insurance premium should not increase due to a PIP claim. A PIP claim may be subrogated by your insurance against the other party’s insurance company if the other party was determined to be the neglligent party in the accident. PIP is a mandatory coverage in some states.

Uninsured/Underinsured (UM/UIM) is coverage from your policy that may pay for injuries to you and your passengers, and possibly damage to your property, when as a result of an auto accident the other driver is both legally responsible for the accident and determined to be “uninsured” or “underinsured.”

An uninsured driver is a person who has no auto insurance coverage, or had insurance that did not meet state-mandated minimum liability requirements, or whose insurance company denied their claim or was not financially able to pay it. In most states, a hit-and-run driver is also considered an uninsured driver as it pertains to paying for injuries to you or your passengers.

An underinsured driver is a person who had insurance that met minimum legal requirements, but did not have high enough coverage limits to pay for the damage caused by the accident. In these situations, UIM coverage can pay you for your damages. It is important to note that uninsured and underinsured is separate coverage, although in many states they can or must be purchased together. Some states mandate purchase of UM/UIM, but many do not.

Collision coverage insures you for damage to your vehicle. No matter if it is a collision between your car and another car, or your car and a stone wall. You are covered if your car sustains damage as a result of colliding into something or something colliding into it, whether you are at fault or not. Your deductible will usually apply. If you collide with another vehicle and the other party is at fault, then your insurance company may subrogate the claim against the at fault party’s insurance company to recover the claim amount.

Comprehensive (Comp) basically covers what collision coverage does not. When your car sustains damage that did not result from colliding with another motor vehicle or object, the comprehensive portion of your policy will pay for the damages. If you do not have comprehensive coverage then you would have to pay out of your own pocket for any damage to your vehicle not related to a collision. Here are the perils typically covered by comprehensive auto insurance coverage: fire, theft, vandalism, broken or damaged glass, animal inflicted damage, falling objects, storms (hail, wind, etc.), and water damage. Your deductible will usually apply.

Rental Insurance (RI) is coverage for you to rent a car while your vehicle is being repaired because of a covered incident. In the above example of declaration page values, the 80%/1500 means that you have coverage for $80 per day and $1,500 maximum total cost to rent a car while your vehicle is being repaired. This is an optional coverage that many people take, but some do not.

Well, that is it! That is the basics of understanding your auto insurance coverage. Not so bad, right? Now that you understand the basics of auto insurance coverage you can review and analyze your personal auto insurance policy’s declaration page coverage information while taking into consideration your personal financials to determine whether or not you have sufficient coverage.

Stay tuned for future articles that will explain the basics of understanding homeowner’s, personal umbrella, and life insurance coverage. You never know when it is going to rain!

Joseph Rubino, Agent
NJ Licensed Property & Casualty, Health, and Life

How to Find the Best Illinois Homeowners Insurance Coverage

How does one find the best Illinois homeowners insurance coverage?The state of Illinois is perhaps one of the most populated in the nation and this means that there are always people looking for homeowners insurance coverage. With so many companies and so many types of coverage in the market, it is always important to have a clear idea of what you want to have and how much coverage you need in order to have a good experience when filing a claim in your favor. Below you will see Illinois homeowners insurance coverage options explained along with the many things that trouble customers about the industry.

Home Insurance Definition In Illinois Homeowners Insurance Coverage

Before we actually try to explain each of the types of coverage associated with a policy in the state of Illinois, it is important to know what homeowners insurance is about and what it means. Usually you need home insurance if you do not own a house and are still paying mortgage. Is the way in which a bank protects itself and you by securing your assets in case of an unexpected accident or a natural event. Homeowners insurance is simply an accord between an insured and a insurance company in which the insured gets a certain amount reimbursed when filing a claim about an accident or the destruction of the residence.

Types Of Policies Containing Different Illinois Homeowners Insurance Coverage Options

There are many different policies that a person gets to see when he or she is shopping for homeowners insurance in Illinois. It is important for the person to get the right one because this will protect them and have them in better shape for the future. Below you will see perhaps the most common of the homeowners insurance policies, each with different coverage according to the Illinois Division of Insurance.
HO-2 (Broad Form): This is perhaps the simplest of the policies and it only covers what is specified within the policy.

HO-3 (Special Form): This is what most people get when they are searching for homeowners insurance because is the one that best fits their needs. The policy simply covers the property and liability coverage for the home, the loss of using your home and other structures. It covers you through all the risks specified in the policy plus personal property.

HO3/HO5 (Comprehensive Form): This type of policy simply covers most of what is excluded in your policy, giving the insured a little bit more peace of mind. One thing to say about this insurance type is that is a little bit more expensive than the others ones and is not offered by every single insurance company.

HO-4 (Tenants Form): This simply provides coverage for a renter’s living expenses, personal property and liability.

HO-6 (Condominium Form): This is a specific type of policy that covers condo owners. It simply allows them to be protected for their personal property plus any alteration made to the inside of the property. They can also buy more so that it protects liability and other property not included in the previous policy.

HO-8 (Modified Coverage Form): This may be what people that own an old home are looking for. The policy simply provides coverage when the old residence replacement costs way more than the houses market value.

Types Of Illinois Homeowners Insurance Coverage

Now that we know the different types of policies with the coverage that they each give to the customers, it is important to dig a little deeper in order to see the exact things that are included in a standard Illinois homeowners insurance policy. The four main types of coverage will be listed below with a brief explanation of what they mean.

1. Coverage for the Structure of your Home: This is perhaps the reason why most people are out there looking for home insurance, to protect their dwelling. The coverage for your home’s structure can be a little tricky because depending on what you add to the cost, your premiums will be higher. Most experts simply tell customers to add to this coverage the market value price of the residence plus any construction prices that you see indicated. Do not add the cost of the land unless you have money to pay higher premiums.

2. Coverage for your Personal Assets: Your IL home insurance company will also give you coverage for the possessions that you have inside of your home. The reason for this is that they understand that under a house fire or a hurricane a person will not be able to take most of their priced assets out of the home. Each insurance company varies in the way that they handle the amount to be distributed in this particular coverage, however it is known that most companies give you from 50% to 70% the price of your residence. Another good thing to highlight about this coverage is that your personal possessions will be covered by the home insurance company anywhere in the world!

3. Liability Coverage: This is a coverage that very recently entered the market simply to evade the owner of the house being sued after a friend or a person gets injured in the property. What this coverage really does is have the person injured make the claim to the home insurance company instead of the owner of the home. This means that they will be associating with the insurance company directly and they won’t have any contact regarding money with the owner of the house.

4. Cost of Additional Living Expenses: This is perhaps the last coverage that a policy in the state of Illinois may have. It simply refers to the living expenses a person needs at the time of the repair or after the destruction of the residence. It is the insured who picks the value of this part of the policy, so make sure that you think about it in a timely manner. Things included under this are transportation, hotel fees and other things of that magnitude.

Disasters That Should Be Provided For With Illinois Homeowners Insurance Coverage

These are just some of the many accidents or natural disasters that a home insurance company in Illinois should cover:

Fire
Lightning
Windstorm
Hail
Falling Objects

Note: Flood insurance is not typically covered automatically under an Illinois homeowners insurance policy without purchasing an additional rider.

Compare Quotes To Find The Cheapest Illinois Homeowners Insurance Coverage

As you can see there is no reason why you can’t have the homeowners insurance coverage of your choice in the state of Illinois. Now that you are more knowledgeable of the types of coverage and what they entail go ahead and give it a try.