Will My Insurance Cover Me If I Am In An Accident

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Many people think if they have “full coverage” they will be covered for any medical bills, lost wages, pain and suffering, mental anguish, etc., they incur as a result of an accident. Think again. This article debunks the “full coverage” myth.

1. What are state minimum limits?

Every state requires a driver to carry insurance on their car, truck or motorcycle in case of an accident. This insurance would pay the injured person for their injuries and damages. In Illinois and Indiana, the minimums are as follows: $25,000 personal injury liability per person and $50,000 personal injury liability per accident. What these numbers mean, is that if you are involved in an accident and the other vehicle is at fault and only has minimum limits, their insurance will pay up to $25,000 for your injuries, medical bills, lost wages, pain and suffering; everything. $25,000—that’s it. Period. The $50,000 amount only comes into play if there are multiple people injured and in that scenario, no one person can get more than $25,000 and no matter how many people are hurt, no more than $50,000 will be paid to cover everyone who is injured. If you are involved in a serious crash, chances are high the minimum coverage will not be enough to compensate you for your injuries. That is why you need to protect yourself with uninsured and underinsured coverage.

2. Why are state minimum limits insufficient?

Let’s say you are on a motorcycle and hit by a car with minimum limits. Let’s say in that accident, you break a leg, require surgery, and are off work for twelve weeks. The state minimum limit of $25,000 is not going to be enough to help you. Or imagine even worse, the driver who hits you has no insurance and you only have state required liability insurance, then you get nothing; zero, unless you have uninsured coverage. And if your uninsured coverage is only the minimum $25,000, that is very likely all you will get. So, again, you can be drowning in debt and struggle to pay your monthly bills. This scenario does not only apply to motorcycle riders. Riders are often just more vulnerable, but if you are driving your car and in an accident, even if you do not have any broken bones or require surgery, a trip to the emergency room, x-rays, MRIs, multiple doctor visits and ongoing physical therapy bills all add up. The state minimum limits are unlikely to help you.

3. Why is uninsured and underinsured motorist coverage so important?

If you are the person in the example above, you are in trouble unless you have uninsured and underinsured insurance with limits higher than the state minimum. However, if you are the person in the above example, but instead of having the minimum limits, you have a $100,000 per person uninsured/underinsured policy or, even better, $250,000 in uninsured/underinsured coverage, you will be in a much better financial situation if injured. You will be able to receive up to the amount you have in uninsured and underinsured insurance coverage rather than just the bare minimum.

4. What is Umbrella Coverage?

Although you can never account for every eventuality, protecting yourself with $250,000 in underinsured and uninsured coverage as described above helps. However, you are not limited to your uninsured/underinsured policy limits if you have what is called an “umbrella policy” that covers you for uninsured/underinsured accidents. A $1 million dollar (or greater) umbrella policy can be purchased and cover you whether you are in your car, on your motorcycle or any other vehicle that falls under your “umbrella.” This type of policy makes a lot more sense than hoping the other driver’s insurance will be enough to compensate you and your family for your injuries, medical bills and lost wages.
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