Does anyone actually read their auto insurance policy? If you are one of the few who have, do you have a detailed understanding of what it covers and what is excluded?
How many of you out there understand that when you purchase “full coverage,” it generally does NOT include coverage for liability? That means if you skid into another car and injure the occupants, you might not be covered for ANY of those damages.
What about those of you who have tried to save a few bucks by reasoning that your car is a rusty old piece of garbage, so why should you pay for collision coverage? Then, if someone without insurance hits your car, you have to replace it and have absolutely no insurance money to use for that purpose.
Liability coverage pays for damage you cause to others. For example, if you hit a vehicle with 5 people inside and all 5 are seriously hurt, you can imagine how much money the claims might cost. If you have liability coverage at the Illinois minimum amount of $25,000 per person per incident and $50,000 per incident total, unless those people are barely hurt, you could wind up without sufficient coverage to pay for their injuries.
Take a situation where you mistakenly hit a pedestrian (it might be because the sun was in your eyes or you were not paying attention…the reasons don’t matter), and the pedestrian undergoes surgery to repair a seriously fractured leg. What value do you think a good lawyer would put on that case?
Depending on the surgery, amount of missed work, medical bills, and whether that person is able to resume prior activities, it could be well into the mid-6 figures. If you only had $25,000 in coverage, you might be liable personally!
The best way to insulate yourself—especially if you have children, assets, own property, or significant cash holdings—is to purchase as much coverage as you can afford. I always recommend a minimum of $500,000 and $1,000,000 if you can afford it. You can also purchase an umbrella policy that covers above and beyond your limits.
If you ride your bike to work, you should check with your insurance broker whether your homeowner’s or renter’s insurance covers you in case you are injured while riding your bike. Unfortunately, bikes are not seen by drivers who often fail to look for them! If the person who hits you leaves or is not insured, you will want to have something to step in and cover your medical expenses.
Another reason to consider auto or other insurance even if you don’t own a vehicle is that it can provide medical payments or PIP coverage, which will pay your medical bills up to a pre-determined limit regardless of fault.
Finally, with the ubiquitous ride shares like Lyft and Uber, you never want to be left without coverage if your driver happens to be a rogue driver (not on the Uber or Lyft platform), or if their insurance won’t cover them because they are using their personal vehicle for commercial purposes.
Sit down and read your entire policy. I guarantee you will not understand it any better after reading it than you did before.
That is mostly by design. Insurance carriers sell by price and advertise heavily, but because consumers (you) are mostly ignorant about even the basics of what they are purchasing, there are often many exclusions that pop up, and people aren’t even aware the exclusions until it’s too late.
There are policies that limit coverage to only the driver. There are policies that exclude vehicles used for special purposes, like drag racing or other car rallies. Certainly, almost every policy excludes commercial use (like driving to a client or delivering newspapers as a side hustle).
Lastly, remember that the Uninsured/Underinsured (UM/UIM) coverage will equal your liability coverage. If you are hit and injured by an uninsured or poorly insured driver, you will want the highest possible limits or you could be left with nothing. For more on this issue, read my blog post, How Your Own Insurance Company Is Your Enemy.
Interested in reading more about auto insurance policies and coverage? I blog on the topic frequently, because it’s extremely important. Check out some of my other blog posts on car insurance:
As in all cases involving injury and potential liability, if you have been hit by a vehicle, immediately get medical treatment, report the crash to police and your own insurance company, and contact a lawyer with expertise in your type of case, such as auto accidents, bicycle accidents or pedestrians hit by cars.
If you've been in an accident and have questions, contact Chicago personal injury attorney Stephen L. Hoffman for a free consultation at (773) 944-9737. Stephen has nearly 30 years of legal experience and has collected millions of dollars for his clients. He is listed as a SuperLawyer, has a 10.0 rating on Avvo, and is BBB A+ accredited. He is also an Executive Level Member of the Lincoln Square Ravenswood Chamber of Commerce.
Stephen handles personal injury claims on a contingency fee basis, which means you don’t pay anything upfront and he only gets paid if you do. Don’t wait another day, contact Stephen now.