This post is part two of the blog post that answers the question “How much car insurance is enough?”
Compensation for Harm You Cause to Others
Drivers in Arizona are responsible for the injuries they cause in an accident. As an at-fault driver, your liability could total hundreds of thousands of dollars for a victim’s medical bills, vocational disability, and emotional distress. A jury may also impose punitive damages if you were guilty of negligence in causing the accident, such as texting while driving. Bodily injury insurance helps cover liability for injury-related expenses up to the limits of your policy.
Bodily injury liability is standard coverage for Arizona auto insurance policies and required by law. Policy-holders select their limits so long as they meet or exceed state minimum coverage requirements. If actual liability exceeds those limits, drivers remain financially liable for any remaining damages. We here at Imes Insurance Associates strongly recommend choosing a high-limit coverage that will protect your income and assets against a possible lawsuit.
Split Limits vs. Combined Single Limit (CSL)
Insurers cover bodily injury as a combined single limit (CSL) or a split limit. A combined single limit caps the maximum available coverage per accident – not per individual. A policy with 300 CSL pays up to $300,000 in total bodily injury liability per collision with no restriction on the maximum amount available per individual.
A split limit caps the available coverage per accident and individual. An example of how it may appear on your policy is 100/300, with the first number indicating up to $100,000 in available bodily injury liability coverage per individual. The second number represents a maximum of $300,000 total bodily injury coverage available for all victims combined per accident.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
A 2014 study found that approximately 1 in 8 drivers is uninsured. If one of them injures you and/or your passengers – uninsured motorist (UM) and underinsured motorist (UIM) coverage can help. UM/UIM coverage does not cover damage done to your vehicle. It provides benefits for bodily injury related expenses caused by a motorist who has no coverage or fled the scene in a hit and run scenario, or they don’t have enough coverage to reimburse you for all your expenses related to your injuries. Unfortunately, underinsured (UIM) claims are not uncommon in Arizona considering state minimum coverage requirements are 15/30/10. It’s also worth noting that these benefits can extend to pedestrian activities and if you’re a passenger in someone else’s vehicle.
Money to Help with the Little Things
Small expenses are burdensome after an accident as well. In addition to the major expenses related to an accident, there are a lot of ‘little things’ like towing charges and rental car fees that can add-up as well. The good news is that most every auto insurance policy we recommend includes coverage for big and small expenses. From towing and rental car fee reimbursement to medical payments that cover you and your passengers regardless of fault, contact our office to find out how we can enhance your coverage benefits.
Beyond Auto Insurance – Umbrellas
Additional liability protection beyond the coverage offered in an auto insurance policy is often recommended. While the bodily injury and property damage liability covers most incidents, some accidents result in financial liability that threatens your income, assets, and way-of-life.
Contrary to popular opinion, high liability claims are not limited to high-speed violent accidents. Low-speed accidents involving individuals who may have compromised health can easily generate high liability claims. An umbrella policy offers extended liability protection that is secondary to your primary coverage.
Additionally, an umbrella can also extend UM/UIM benefit protection over your primary coverage. This is of particular value in Arizona, where the statute allows healthcare professionals to file “medical liens” for the full cost of their services. If your injuries were caused by another person, Arizona statute allows healthcare professionals in Arizona to “balance bill” you for services rendered, even if part of their bill was paid by your health insurance. This legal reality could have serious negative financial consequences should those liens exceed your auto liability limits and you find yourself having to pay them personally.
Your insurance policies are financial resources that can protect you when you are liable for injuries to others, as well as when you are injured by someone else. When you consider medical bills, disability, loss of future wages, and emotional distress as potential elements to a claim, we recommend an umbrella policy with the UM/UIM endorsed to provide continuation of payment for damages that exceed the limits of your primary coverage.
Most umbrella policies provide a minimum of $1 million in liability coverage, though higher limits may be recommended. Contact our office today to find out more about this important coverage and how it could protect your financial future.