Most of us never give much thought to our automobile insurance. We are entertained by the humorous and silly commercials from the insurance companies. At no time has a talking camel made me want to look into purchasing automobile insurance from a certain company. We meet with our respective agent or broker who provides suggestions to meet our particular needs and make sure we pay our premiums, to comply with state law. Missouri statutory law under Section 303 defines the requirements for the Motor Vehicle Financial Responsibility Law. Every vehicle must have a minimum of $25,000.00/ $50,000.00 for both liability coverage and uninsured motorist (UM) coverage. The $25,000.00 is the maximum amount of recovery for any one individual making a claim. The $50,000.00 is the maximum amount that can be recovered for one event or crash. The liability coverage is there if you are involved in a crash, it is likely your fault and another individual makes a claim against you for personal injury. This is what we would call a 3rd party claim. The Uninsured Motorist (“UM”) portion of the policy is there to protect you if you are involved in a crash, that was caused by an uninsured motorist (or unknown vehicle) and in which you have been injured. This is called a 1st party and would be made against your insurance company. Any other coverage offered under your automobile insurance policy, is not required by law.
When a client comes in for a consultation and is asked about their automobile insurance coverage, 90%+ of them say “I have full coverage.” This usually means that they have the state mandatory minimums, for liability and UM, as described above. The most common additional coverages not required by law are “underinsured motorist” (UIM) and “medical payments.” UIM coverage is there to payout when the individual that was responsible for your injuries had coverage, but it is not enough to cover all of your damages. As you might imagine it doesn’t take long to exhaust $25,000.00 if you have a very serious injury. I have many examples of clients who sustained serious injuries, and were never truly compensated for their injuries because the other driver did not have enough coverage and my client never purchased UIM coverage.
Medical Payments is what we call no fault insurance. Whether the crash was your fault or someone else’s, you would send your carrier copies of medical bills, co-pays or deductibles that were paid out of pocket, for treatment of your injuries, and they would reimburse you up to the limits. We typically see these in $1,000.00 increments. These are coverages that I would recommend you discuss with your agent or broker. Insurance in Missouri is very front end loaded (The majority of the premium is going to be for the required liability and UM coverage) and will not add a whole lot of additional costs.
The automobile insurance industry has become very competitive over the years as these companies try to catcher a larger portion of the market share. With difficult economic times, we look to save money by going with an insurance company that offers a lower premium. As the adage goes, “you get what you pay for.” You truly do not know how good your carrier really is, until you need to make a claim, or a claim is made against you. Having been on the side of the insurance companies for a number of years, before becoming a Plaintiff’s attorney at the Thurman Law Firm, I can tell you that there is a clear correlation between the cheaper insurance companies and the quality of service (or lack thereof). As a consumer, it is important to do your homework before going with a particular carrier. Word of mouth is a good resource, however, ask the person referring you if they have ever made a claim and how it was handled. If their basis for recommending a carrier is that they like their agent, or they really like their commercials, then you may want to look a little further before making a decision. One good resource is to check the complaints filed with the Missouri Department of Insurance: http://insurance.mo.gov/consumers/complaints/compindx.php .
When you meet with the agent or broker, treat it like an interview. After all, you are giving them your hard earned money. They should be able to answer any questions you have about the different coverages and cost. The last thing you want is to find yourself in a position where you are making a claim (or one is being made against you) and realize your carrier has a poor history of handling claims, and that they are not nearly as funny as their commercials. Trust me, some of these claims adjustors will go from seeming very concerned about your well-being to calling you a liar in the very next conversation.
As an attorney that worked for the insurance companies for almost a decade, I can tell you that not all insurance carriers are created equal, and cheaper is not necessarily better. Informed decisions before purchasing automobile insurance coverage can make your life a lot easier, if you are involved in a car crash. In my next article I will discuss what to do and what not to do, if you are involved in a motor vehicle crash.