Insurance or No Insurance: How it All Works and What it All Means! (Part II)
If you missed it, see Part I of this conversation about car insurance—worth it or not, here.
It is amazing to me how many people think they know all there is to know about insurance simply because we all have insurance! This is part of a series of blogs related to car wrecks and personal injury claims. Check out the related blogs here , here and here.
The most important time to know what kind and how much insurance you have and what options you have for coverage is before you’re in an accident and need your insurance!! Can’t change it then. You’re stuck with what you have, the good and the bad. Usually the bad!
Here’s the scoop on the other kinds of car insurance that we didn’t cover in Part I of this series:
Underinsured Motorists Insurance
This is coverage if you are in a collision and the at-fault party does not have enough insurance. Most motorists only carry the state minimum of $25,000. If you are seriously injured, unable to work, drive a valuable car, $25,000 is not enough. It is said that at least 20% of drivers have no insurance and twice that have only the minimum coverage. $25,000 is almost never enough for any accident beyond a simple fender bender. The cost is low for UIM coverage; and it is advisable to carry it.
This is coverage if you are in a collision and the at-fault party has no insurance or cannot be found. A hit and run, for example. This is different than Underinsured Motorists Insurance, but the principle is the same. That same high number of drivers on the road who don’t have insurance are likely to flee the scene. If you can’t prove they didn’t have enough insurance (and you can’t if you don’t know who they are), then your UIM coverage won’t apply – you’d need UM coverage! They are usually purchased together and are inexpensive; it is advisable that you carry it.
Insureds must specifically opt out of Medical Coverage in Arkansas. This pays for medical payments if you are hurt in a car accident no matter who is at fault. The vast majority of policies include $5000 in “med pay.” This coverage is relatively inexpensive and you should consider higher coverage for medical payments because often times treatment requires money up front and it can take months to settle car accident liability payments. Arkansas law require that there be a specific signed document opting out of this coverage for it to not apply. Most folks don’t sign that (and they should absolutely not!).
Personal Injury Protection
This is an extension of automobile coverage which pays for things such as health insurance deductibles, lost wages, income continuation, even funeral expenses. If you have this coverage, you should have a copy of your policy stored in your files so you can always reference what kind of insurance you have when you need it most.
Rental Car Coverage
Rental car coverage is not standard in Arkansas policies. You should ensure that you carry it. It is very inexpensive and can save you hundreds of dollars in transportation costs in the event you are in a collision (your fault or not) and your car is totaled or needs extensive repairs. The first car wreck I was in about 5 years ago I did not have rental car coverage!! It was horrible. I was so mad – at myself and my agent for not ensuring that I had it. Lesson Learned: I have it now.
Deductible & Premiums
Insurance is designed to protect you in the event of catastrophe. It is recommended that you purchase insurance with a high deductible to lower your monthly premiums. Over the course of many years, what you save in premiums is worth the higher deductible if the unimaginable happens. Remember insurance companies are in business to make a profit, not protect you. Agents have a self-serving interest to sell the most coverage, needed or not, to increase their commissions.
Review your policies annually to determine if you have the appropriate amount of coverage for your real and personal property and your financial assets. Too low, and you are not adequately protected in the event of disaster. Too high, and you are wasting money on premiums for coverage you couldn’t collect even in the event of disaster. It is financially important to strike a happy balance.
Leigh Law offers traditional legal services of representing people after they are injured in a car accident; but we also offer modern, non-traditional services of analyzing your insurance plan for appropriate coverage for your particular life and financial circumstances.
Your insurance agent has an incentive to sell you as much coverage as possible because that agent is paid a commission based on how many products he or she sells. At our office, we charge a flat fee to analyze and discuss what you have and almost always save the clients more money than what they paid in their flat fee analysis.
We don’t sell insurance and will not refer you to someone – that creates a conflict of interest and draws into question our neutrality! We will answer your questions, review what you have, and arm you with information to go back to your agent and change what you have to exactly what you need.
Call For A Free Case Evaluation
Case evaluations are completely free; our fees are flat and affordable. Call Leigh Law today at (501) 227-ROAR or Email Us to ensure that you are making wise decisions now which will last far beyond the entry of the divorce decree.