Having been in practice as a chiropractor for over fifteen years, I have treated hundreds of patients who have been injured in auto accidents. Over the years I became aware that most of my patients were in my opinion, “under-insured”.In terms of auto insurance coverage, one important coverage amount is the Liability limits. This includes the amount your insurance will cover for property damage and also for bodily injury. This is used when you are at fault in an auto accident. Often low coverages mean if you are involved in a multi-vehicle crash and are at fault, the combined injuries and damages could exceed you limits. If you can financially afford higher limits get them. If you have any net worth or assets to protect as well as future income earning potential, I recommend having higher policy limits and an umbrella coverage plan.
I often see patients who had damages that exceeded the policy limits of the person that caused the accident. When this occurs, the only other way to attempt to collect the remaining damages that may include medical bills, lost wages, or pain and suffering, is to take the person to court. Often that person may have no assets and may not have any income to provide, even if you are awarded a judgment. So one should always carry an uninsured or underinsured coverage on their policy. This policy can be used to then pay out any remaining medical bills, lost wages, auto repairs or replacement, and damages when the defendant’s insurance is maxed. This is your insurance and the law states they must under full faith and trust reasonably compensate you for the differences.
How much do you need? I suggest sitting down with your insurance agent and reviewing your coverages and your lifestyle and income. Consider this scenario that I have seen too often.
You are rear ended in a brand new car that you purchased for $40,000. The car has major damage and the frame and one axel are bent. The insurance company deems your car a total loss, but the person who hit you has only 15k in coverage. If you have no uninsured or underinsured coverage you could be out 25k, but with this coverage your insurance will pay out to what the agreed value of the car is.
Now you had your family of 4 in the car and each had moderate injuries including a trip to the ER, x-rays, an MRI, several medical visits, chiropractic, and physical therapy. The bills are over 10k each, or a total of 40k, but the person who hit you only covers a max of 30k. Again you have the option of suing them in small claims court and then trying to collect your money, good luck.
Bottom Line: Carry both liability in a high limit (I suggest 250k/500k) and the same for underinsured or uninsured. Increasing the limits only costs a little more relative to the increase in coverage you gain.
Also consider adding Medical Payments to you plan. This allows your bills to be paid whether you are at fault or not up to the limit you chose.
One of the biggest misses I see is:
Not having any disability insurance policy in place.
I have seen so many of my patients suffer both physically and financially, while being out of work due to injuries that prevent them from return to their normal jobs. Take a housekeeper or a carpenter, serious back or neck injuries may preclude them from returning to work for several months or years. If you pay into State Disability you may file and collect if eligible, but it will not be 100% of your normal wages, and may run out before you are able to return to work. Often self- employed individuals don’t even pay into State Disability and are left with no income after a serious accident and injuries.
Protect yourself and plan ahead, find a short term and/or long term policy that meets your needs, so you can still pay your mortgage, rent, groceries, and take care of your family while you are recovering.
We all say it probably will never happen to me. But I say it very well could and based on my years of experience I have seen parties injured who were out of work for several weeks, to months, to over a year. I have seen them struggle to keep their homes and often see them left in a financial ruin, waiting until their claim is settled, which can be years after the actual accident. I have treated students, high earning executives, attorneys, doctors, housekeepers, and care-givers all injured and unable to work for several months.
Don’t wait, plan ahead and protect yourself and your family. Find out what coverages you have and review them. Contact your agent or insurance carrier directly to review and chose to be over-protected versus under-protected.
The above statements are my opinion, but are based on my experience with working with and treating patients injured in auto accidents over the last fifteen years.
David Knepp DC
San Diego Chiropractic Group