Are You Properly Insured?

One of the most important things we want to get across to our viewers is to be properly insured. There is a common misconception that car insurance is one size fits all and if you have car insurance you are totally protected and have nothing to worry about. Its one of those things you just don't think about, until AFTER something bad happens. That's when you realize that a very small change made before an accident can make such a huge different after an accident. That brings us to a type of car insurance coverage called under insured / uninsured motorist coverage (UIM & UM).

At its most basic level Under Insured / Under-insured Motorist coverage will protect you and your family in the event that you are a victim of an auto accident and the at fault driver does not have adequate coverage. State law in Maryland requires you to have at least $20,000 in UIM/UM coverage for yourself or $40,000 total for an accident with passengers.

Scenario #1

To start with a basic example; what if you are a victim of a hit and run? You are driving and all of a sudden someone hits you then the at fault driver speeds off never to be seen again. This is when uninsured motorist coverage picks up and covers the accident under your insurance policy. Basically what happens is your insurance company takes the role as if they were covering the at-fault driver. Lets take a look at the numbers so we can get a clearer idea of how this works. We know the minimum coverage of uninsured motorist coverage is $20,000 in Maryland so you would be covered up to $20,000 in damages due to the accident. Now lets say you are 25 years old and have a car that is paid off and pay $1200 per month for rent. If your accident causes $10,000 in medical bills then your minimum policy of $20,000 in coverage would be more than enough to take care or your medical bills.

Maryland Minimum Requirement for Under Insured / Uninsured Motorist Coverage: $20,000

Your Medical Bills: $10,000

Your Lost Wages: $5,000

Outcome: GOOD - In this scenario you would be properly insured.

Scenario #2

What if you are driving with a friend and the same scenario as above happens. Lets see how the outcome can change if you have a passenger in your car.

Maryland Minimum Requirement for Under Insured / Uninsured Motorist Coverage: $40,000

Note: $40,000 is the maximum amount your insurance company will cover for the entire accident, no matter how many passengers are in the car.

Your Medical Bills: $10,000

Your Lost Wages: $15,000

Passengers Medical Bills: $15,000

Passengers Lost Wages: $15,000

Total Expenses : $55,000

Outcome: BAD - Here is where you can see the minimum coverage may not be enough. The minimum for the driver is $20,000 which might be enough for a single driver, however you can see the minimum for the total accident with passenger is only double that. Well in the above scenario what if one person was more badly injured? What if there was more than two passengers in the car? Clearly this is NOT enough coverage. 

So what happens to the amount not covered in the above scenario? Well the next level of coverage is called Personal Injury Protection or PIP. We will cover that in another article.

Scenario #3

Taking that example one step further, what if you own two cars that you make payments on and have a $600,000 waterfront home, you also support a wife and two children. What if you get hit by a driver with no insurance and you are sent to the hospital and have $30,000 in medical fees. The driver that hits you will go to jail, but now what happens to your medical bills, lost wages and your car now that it is totaled?  We can already see the $20,000 is not enough to pay your medical bills, let alone your other expenses.

Outcome: VERY BAD

Taking all the above scenarios into consideration you can clearly see the minimum coverage is NOT enough for the average driver on the road. We hope you take this information and use it to protect yourself and your family. There are many under insured / uninsured drivers on Maryland's roads. Typically the same drivers that do not have proper insurance are at a higher risk to be involved in an auto accident. The law offices of Belsky, Weinberg & Horowitz handles auto accident cases on a daily basis and we want what is best for your family. To help you get the best results it is important that you are properly insured. If you have additional questions please contact our firm, we offer free consultations to answer any questions you may have.