In our practice, we often find that clients do not fully understand the limits of their automobile insurance policy limits and the different types of coverages available until after an accident has occurred. Unfortunately, by then it is too late! Here are the three most important elements of automobile insurance coverage, and our recommendations.
Liability Coverage: This coverage insures you for damages that you cause when you are at fault for an accident. Policy limits are typically expressed on a per person/per incident basis. For example, a policy with limits of 50/100 will pay up to $50,000 to any one person injured in an accident that you cause, but no more than $100,000 in any one accident no matter how many are injured. Under those limits, the insurance company will pay no more than $100,000, no matter how many people are injured (and no single person can receive in excess of $50,000). Other policies are “single limits” policies, where the insurance company agrees up to the policy limits amount (for example, $100,000) to any and all persons injured in an accident where the insured person was at fault. The Aitken Law Offices recommends that individuals carry limits of no less than $100,000/$300,000, and those with homes and other assets to protect should probably purchase higher limits.
Uninsured Motorist Coverage (UM): UM coverage compensates you when you are injured in an accident that is the fault of an insured driver. The limits of UM coverage are expressed in the same manner as liability coverage (e.g., 100/300). In an uninsured motorist situation, the injured person proceeds directly against his or her insurance company in an arbitration proceeding. The Aitken Law Offices recommends that UM coverage be purchased in the same amounts as liability coverage. Beware: insurance companies are reluctant to sell UM coverage, and often encourage consumers to purchase low UM policy limits, or automatically enroll insureds with UM coverage at levels for below their liability coverage. Do not fall into this trap. UM coverage is your family’s best protection in case of disaster, so always be sure to purchase UM coverage at limits no less than your liability coverage.
Underinsured Motorist Coverage (UIM): UIM coverage applies where the at fault driver is insured, but has policy limits below that of the injured person. In those instances, the injured person can make a claim against his or her own insurance company for the difference between the negligent party”s coverage and the UIM limits. For example, assume an accident is caused by someone with $25,000/$50,000 liability coverage, and the injured person has UIM limits of $100,000/$300,000. In that case, the injured person can claim an additional $75,000 from his or her own insurance company (the $100,000 per person UIM limits minus the $25,000 policy limits received from the at fault driver). UIM coverage is automatically included with, and at the same limits as, the UM coverage purchased by the consumer. Therefore, the same advice regarding purchasing adequate limits discussed above applies equally here.
Liability coverage protects your personal assets from a judgment in accidents where you are at fault, and UM/UIM coverages guarantee your family a level of financial protection from uninsured or underinsured drivers who cause you or your family injury. It is crucial that your family is adequately insured in these critical areas. If you have any questions, please feel free to call discuss your current coverages and whether they are appropriate to your financial situation.
Our Professional Involvement
The attorneys’ of The Aitken Law Offices are members of various professional groups that provide continuing legal education and other information that allow us to serve our clients better. Recently, Richard Cohn assumed the presidency of the Orange County Trial Lawyers Association (or “OCTLA”), a county-wide legal organization dedicated exclusively to the protection of consumers’ legal rights. Darren Aitken was elected to the governing board of the OCTLA, as well as an at-large board of the statewide organization, the Consumers Attorneys Of California. Wylie Aitken continues to serve on the national board of the American Board Of Trial Advocates (“ABOTA”) and the statewide Task Force on Judicial Facilities. Christopher Aitken continues his involvement with South Orange County Bar Association (“SOCBA”) and continues to serve as a board of director of Laura’s House.