Part II – Uninsured Motorist And Under Insured Auto Insurance Coverage
I am always amazed when reviewing my clients’ car insurance policies as to how little they really know about what they have purchased. Their automobile insurance decisions are usually based on price alone. Many try to reduce their insurance coverage cost by purchasing as little insurance as possible, believing that they are immune from life’s setbacks.
Pennsylvania residents declining UNINSURED driver and UNDERINSURED driver coverage are two examples of where people are penny-wise and pound-foolish. These are perhaps two of the most important coverage one can have. DO NOT EVER WAIVE THESE CAR INSURANCE COVERAGES.
Uninsured Vs. Underinsured Policy Coverage Explained
- UNINSURED auto insurance coverage is basically a policy within your policy which offers motorists coverage if the person at fault does not possess automobile insurance at all. If that person does not have a policy they also are likely not to have any assets. Recent statistics have revealed that almost 50% of all drivers in Philadelphia drive uninsured. Scary thought, isn’t it? If you purchased uninsured motorist insurance coverage you would be able to make a claim against your own car insurance company under the terms of this mini-policy. By the way, this insurance coverage is dirt-cheap. I’ve seen policies where it is as little as $8.00.
- UNDERINSURED coverage is the same as uninsured except it provides coverage for you if the other driver at fault does not have enough insurance to cover the amount of your losses. In Pennsylvania, people are permitted to maintain as little as $15,000.00 in liability coverage. If you have any kind of serious accident you may have a claim worth far in excess of $15,000.00. With underinsured coverage you can look to your own company for the difference. This insurance is also dirt-cheap.
Car Insurance Stacking Explained
Under Pennsylvania law, “Stacking” is available for purchase under your auto insurance policy. Car insurance stacking relates to your underinsured (UIM) and uninsured (UM) motorist coverage. This car insurance coverage is available to pay you back if the person who injures you does not have enough coverage.
Here’s how stacking works: If you have $100,000 of “bodily injury” coverage on your car (that’s the coverage which protects you if the accident is your fault), then you are allowed to purchase up to $100,000 of both UIM and UM insurance coverage. In addition, if your coverage is stacked and you have two cars, then you will then have $200,000 of UM/UIM coverage available to you. Three cars – $300,000. Do not reject these! The increased cost to you will be small, but if you are in an accident, the savings could be substantial.
Advising Our Clients On Car Insurance Decisions
Now why wouldn’t you have this insurance? By law in Pennsylvania, you are automatically given underinsured and uninsured coverage which equals or matches your liability coverage unless you take specific steps to sign a written waiver giving up your right to this coverage. You can’t imagine how many clients have come into my office who become devastated when they learn that there is not much that can be done for them if they have given up these rights just to save a couple of bucks.
If you have either waived or lowered this car insurance coverage, call your agent today to move it back up to equal your auto liability coverage.