In discussions with clients, we often discover that many people think that their motor vehicle insurance protects them, but actually don’t have a good understanding of what that coverage really means. This can put you at legal risk. We see these situations often in car accident cases.

Vehicle insurance protects more than your car or truck. It also protects your assets from being put at risk if you cause an accident, or protects you from not getting any money if someone that hits you doesn’t have any (uninsured) or enough (underinsured) insurance coverage. 

You might not realize you don’t have enough liability coverage to protect your assets for a few reasons:  your life continually changes, and as you improve your finances, start a family, and acquire property, your exposure to risk changes.  People often think of auto insurance this way:  you either have it, or you don’t. So you may not realize until it’s too late that you need more insurance than originally purchased.

Often, what is legally fine coverage when you’re just starting out becomes severely inadequate even just a few years later. And as your situation changes, there may be coverage that you need that you didn’t consider when you first signed up for your insurance policies. 

So it’s a good idea to review your coverage every year or so, when your policy comes up for renewal. Look carefully at the following elements of your policy:

Liability: This protects and gets paid to the other person when you cause a wreck. Georgia law requires bodily injury liability of $25,000 per person and $50,000 per accident.  This is a minimum, and many accident situations will ultimately have much greater monetary damages. If your auto policy coverage isn’t enough, your assets could be at risk for anything over the amount of coverage you have.

Underinsured/Uninsured Motorist: This protects and gets paid to you if another person causes a wreck but doesn’t have any or enough insurance coverage. Every person should have this coverage since many people that cause wrecks only purchase minimum state requirements. There is also the option to choose “add-on, stacking, excess” or “off-set, traditional, reduced by” when selecting this coverage. Always choose the “add-on, stacking, excess.”

Property Damage: This protects and gets paid to the other person when you cause a wreck. This has nothing to do with the value of your vehicle and everything to do with the value of a vehicle you damage. This protects The Georgia requirement for property damage liability is $25,000 per accident. This again is a minimum, and if you were to cause an accident with greater damage amounts, you could have to pay. Boosting your coverage can be an inexpensive way to protect yourself. 

Umbrella Policies. This protects your assets if someone is entitled to money beyond the limits of your policy. The person could go after your assets (financial, property, etc.). This policy protects those assets and is another level of insurance. Often, your insurance agent can offer an “umbrella” policy that provides liability protection for more than your automobile (your home or other property, for example). These policies can provide expanded liability coverage at a reduced cost. 

When we help clients assess legal risk, we can also help with a review of insurance coverage and work with your insurance provider to make sure you and your family are properly protected. If you have questions about the legal aspects of insurance, please don’t hesitate to contact us.

Originally posted 2020-10-01 12:00:07.

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