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 30
days 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
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