If you're like most people, you probably don't read much of what your auto insurance company sends you, other than the bill. Should you be involved in an accident, however, it's important that you know what you've paid for and how to take maximum advantage of your insurance coverage.
Contrary to popular belief, there really is no such thing as a "standard policy" when it comes to auto insurance. As is true with many things in life, you get what you pay for.
This brochure, prepared by the Washington State Trial Lawyers Association, is a guide to help you understand in simple English what kinds of coverages are offered and in what minimum amounts you should buy it.
What coverages are available? What are the limits of coverage?
1. Liability. Liability coverage protects you or another driver insured under your policy if either of you are found legally responsible to pay for someone else's injuries or loss arising from an accident.
This coverage will pay damages for bodily injury and property damage. Bodily injury is broadly defined to include the sickness, injury, or death of another person, and typically includes economic and wage loss as well, provided such losses arise out of a bodily injury. Property damage covers financial losses arising from the damage, destruction, or loss of use of another persons property.
Since this coverage protects you and your personal assets, it is one of the most important coverages you can buy. Washington law requires that you have minimum bodily injury liability limits of $25,000 per person/$50,000 per accident. The lower "per person" limit is the maximum amount of coverage available for a single injured person. The higher "per accident" limit is the maximum total amount of coverage when more than one person is injured in the same accident.
For your own protection, you should buy the highest liability coverage you can afford. It's important because these limits will also determine the amount of under insured motorist coverage available to you. You should have a single limit of $300,000, or split limits of at least $ 1 00,000 per person/$300,000 per accident, and property damage liability of at least $25,000 per person/$50,000 per accident. If you have had other accidents, however, or have a bad driving record, you may not be able to purchase coverage above the minimum limits required by state law.
2. Personal Injury Protection (PIP). PIP pays for medical expenses and wage loss for you and other passengers in your car, without regard to who caused the accident. It also covers pedestrians and bicyclists who are injured in an accident with you.
Although you are not required to purchase PIP coverage, it is recommended that you do so, and that you buy the maximum amount available.
PIP coverage provides for payment of medical expenses, wage loss benefits, burial expenses, and other services such as home nursing care and domestic help during recovery from an injury. PIP benefits are limited by a maximum dollar amount and for a specific period of time, whichever comes first.
State law requires that PIP coverage be offered and that it meet certain minimum requirements. You will automatically have PIP coverage in the minimum amounts identified below, unless you reject it in writing. For medical expenses, the minimum coverage is $ 10,000 for bills incurred within three years of the accident. Funeral expenses up to $2,000 must be covered, and wage loss benefits for one year after the accident, up to $10,000, must be offered. Benefits for such services as home nursing care and domestic help - known as "loss of services" benefits - must be available for a minimum of $5,000.
Insurance companies also are obligated to offer higher PIP coverage - at an additional cost - for payment of medical expenses up to $35,000, for income continuation benefits up to $35,000, and for loss of services up to $40 per day, for up to one year from the date of the accident.
Despite the trend toward making PIP coverage more available, many insurance companies are becoming increasingly aggressive in restricting payments for treatment they consider "unreasonable" or "unnecessary." For instance, insurers are increasingly likely to attempt to cut off PIP payments before one year when chiropractic care is involved.
You may need to talk to a lawyer if your insurance company attempts to restrict your PIP coverage following an accident.
3. Under insured Motorist Coverage (UIM). Despite the fact auto insurance is mandatory in Washington, many people drive without any coverage or without adequate coverage to fully compensate an injured person. Mandatory insurance laws require liability coverage of only $25,000 per person/$50,000 per accident.
Under insured Motorist Coverage (UIM) covers you, members of your household, and other people riding in your car against damage caused by an uninsured or under insured motorist. This coverage also extends to you or members of your household who may be injured by an under insured/uninsured motorist while you are a pedestrian or riding a bicycle.
That's why it's important, if you experience an injury or loss caused by a driver who is uninsured or under insured, to have your own UIM. UIM coverage is considered so important that the law requires insurance companies to offer it to all customers. The amount of UlM coverage offered must be the same amount as the liability coverage (i.e., $100,000/$300,000) unless you make a written request for less coverage.
You should never waive this coverage or reduce it below your liability coverage. If you want to cut costs on your policy, consider paying higher deductibles or even dropping collision or comprehensive coverage. There are simply too many uninsured and under insured motorists on the road today.
4. Collision. Collision coverage pays for damage to your vehicle from an accident or collision regardless of who may be at fault. Collision coverage will pay for repair or replacement of a vehicle, up to the fair market value of the vehicle, subject to a deductible which may range from $ 100 to $500. You can reduce the cost of this coverage by choosing a higher deductible amount. Your cost can also be reduced by not carrying collision coverage on older vehicles which have lower values.
5. Comprehensive (or "Other than Collision"). This coverage protects your vehicle from damage caused by fire, theft, vandalism, weather, glass breakage, and contact with an animal. Note, however, that this coverage usually does not cover such items as cassette tapes, CDs, tape decks or car phones. These items can be added by specific endorsement. The recommended deductible for comprehensive is $100.
6. Other Insurance Options. Other coverage which is typically offered includes towing and car rental. For a small additional cost, these services are usually worthwhile.
Who is covered by your policy?
1. Named Insureds. Generally, it is wise to have both a husband and wife listed as named insureds because under some policies there is broader coverage for named insureds than other persons insured under the policy, such as nonspousal family members or other residents of the household.
2. Other Insureds. Although a policy usually only has one or two named insureds, there can be a limitless number of other insureds under a policy. The language of the policy tells you who the other insureds are. Family members of a named insured are generally considered as insureds under the typical automobile insurance policy. There may be limitations, however, requiring the family member be related by blood, marriage, or adoption and a resident of the same household as the named insured. Children temporarily away at college are usually covered under their parents' policy. Unmarried co-habitants are usually not considered members of the same family.
Coverage is also normally extended to anyone who uses an insured vehicle with the permission of a named insured as long as their operation of the vehicle is within the scope of the permission at the time of the accident.
What vehicles are covered by your policy?
1. Newly-Acquired Vehicles. If you buy a new vehicle, it is generally covered under existing insurance, provided you ask the insurance company to add the vehicle to the policy within 30days of the date it is acquired.
2. Temporary Substitute Vehicles. This coverage can vary greatly. Generally, a vehicle temporarily being used because of a breakdown or servicing of an insured vehicle will be insured under your policy. A rental vehicle will often times - but not always - qualify as a temporary substitute vehicle. Be sure to check your policy for what coverage applies to your use of a rental car. Also, remember that vehicles which are provided to you for your work by an employer are almost never covered under your personal policy.
No-Fault Auto Insurance:
A radical experiment that does not work.
Many people - consumers and public officials think "no-fault" is a pro-consumer approach to auto insurance. The name certainly sounds good. But experience shows that no-fault auto insurance fails to make good on its three major promises of reducing rates, minimizing litigation and speeding up the resolution of claims.
In fact, after a state enacts a no-fault auto insurance law, the following inevitably occurs:
* Consumer insurance costs rise;
* Benefits shrink;
* The insurance industry makes more money.
No-fault is an attempt by the insurance industry to increase profits by limiting payments to injured people for pain, disability and suffering. In other words, consumers must give up the benefits they currently have under a fault-based system, or pay more money for the same coverage they now enjoy.
Insurance industry profits in states with no-fault are significantly higher than in states without it. Insurance companies in Washington already make billions of dollars in profits on automobile policies. Of the $19.6 billion in premiums collected in Washington during the years 1975-1992, only $11.8 billion was actually paid out in losses.
If the insurance companies are ' interested in real reform, they would reduce rates to consumers, or increase benefits. No-fault eliminates a major incentive for good driving: the financial consequences of an auto accident. Our current legal system encourages safer driving because people know there are economic consequences if they do not. Eliminate this incentive, and the result may well be more fatal accidents, and higher medical and legal costs.
Duties after an accident
If you are in an accident involving injuries or property damage, there are basic guidelines you should follow. These steps will help you avoid hassles with claims adjusters, and assist you in obtaining fair compensation for your injuries and damages.
1. If you are injured, obtain medical treatment. Go to the nearest hospital emergency room or to your personal physician. An injury, if untreated, may become substantially worse. If you fail to seek treatment, or delay in obtaining medical attention, an insurance adjuster may Suspect that you are not genuinely injured and discount your claim.
2. Assist the injured. If someone is seriously, call 911 or the police and tell them an ambulance is needed. Make the injured person as comfortable as possible, but do not move him or her unless it's absolutely necessary to avoid further injury.
3. Insist on a police investigation and report. In many cases, there are no witnesses and you and the other driver may have conflicting versions of how the accident happened. If you do not request a police investigation, you may seriously damage your chances of obtaining full compensation, or may be blamed for an accident that is not your fault.
4. Do not move your vehicle while waiting for police to arrive. Unless your vehicle poses an immediate hazard to other traffic, it is important that you leave it in the same position that it came to rest after the accident. Ask the other driver not to move his or her vehicle until the police arrive. The single most important piece of evidence that the police officer has for determining fault is the positions of the vehicles after the accident.
5. If you are injured, tell the police officer. The first record of your injuries will be contained in the investigating officer's report. If you fail to mention to the police officer that you were injured, it may create suspicion in the mind of the insurance adjuster who will ultimately evaluate your claim that you were not hurt. Ordinarily, the officer will ask if you are injured. However, if the officer fails to ask if you are injured, or assumes that you are all right, let the officer know immediately of any injuries.
6. Obtain names and telephone numbers of eyewitnesses. Often, by the time a police officer arrives at the scene, witnesses to a collision will be gone. Therefore, it is very important for you to identify any witnesses and write down their names, addresses, and telephone numbers.
7. If you have a serious injury, do not try to settle your own claim. if you have suffered a serious injury requiring follow-up medical attention, you should consider hiring an attorney to represent you. An experienced personal injury attorney will generally be able to obtain substantially more compensation for you than you will be offered in settlement by an insurance adjuster, even after payment of an attorneys fee.
If you choose to accept a settlement for your injury without seeking legal representation, you may receive a settlement that does not fairly compensate you for permanent injuries and damages. Once a claim is settled, it can never be reopened. The best rule is not to sign a release for at least six months following an injury. If you're uncertain about whether to settle, talk to an attorney who handles personal injury cases.
Most attorneys handle injury cases on a contingent-fee basis, meaning there is no charge unless they recover compensation for you. You are responsible for out-of-pocket expenses, called costs, advanced by your attorney. There is usually no charge to review your claim with an attorney.
8. Report your loss to your insurance company, but do not give a statement to the other driver's insurance adjuster.
The odds are that a claims adjuster for the other driver will be assigned to your claim before you have been able to retain an attorney. This may occur within one or two days of the accident. The adjuster will request permission to take a recorded or written statement.
If you are considering hiring an attorney, you should not give a statement to an insurance adjuster for the other driver. Statements made can seriously prejudice your case without you even knowing it. Instead, tell the adjuster that you have decided to hire an attorney, and instruct him or her to refer all further questions to your attorney.
9. Your time for Making a Claim is Limited by Law. For every injury or death claim, there is a period of time during which you must file your claim with the court or it will be barred. This is called a Statute of Limitation.
In Washington, the period for bringing an injury or death claim is usually three years from the date of the accident, but there are some exceptions. The period for bringing a claim for injury to a child does not begin to run until the child's 18th birthday. A claim arising out of the death of a child, however, is usually limited to three years. For accidents which occur in other states, the period may be as short as one year from the accident.
Although you may have longer to actually file your claim with the court, generally, the sooner you can consult with a personal-injury attorney following an accident, the more the attorney can do to help you on your claim