Auto Insurance And Personal Injury: What's Covered?

Auto insurance is a legal requirement for drivers in most states, and it's designed to help pay for injuries and damage to vehicles and property in the event of an accident. The exact nature of the compensation you'll receive depends on the type of insurance coverage you have, the state you live in, and the circumstances of the accident.

In general, auto insurance will compensate you for injuries sustained in an accident, but the specifics can vary. For example, medical payments coverage (or MedPay) will cover your medical expenses after an accident regardless of who is at fault. On the other hand, personal injury protection (PIP) is required in some states and can cover your medical expenses and lost wages resulting from an accident, again regardless of fault. If the other driver is at fault, their liability coverage can help pay for your medical expenses and vehicle damage. If they don't have insurance or don't have enough coverage, uninsured/underinsured motorist coverage can help pay for your injuries and vehicle damage.

It's important to carefully review your auto insurance policy to understand what is and isn't covered, as well as any deductibles or limits that may apply.

Medical payments coverage

MedPay can help pay for medical expenses for you or your passengers, regardless of who is at fault for the accident. This includes hospital visits or stays, nursing services and care, ambulance and EMT fees, health insurance deductibles and co-pays, and surgery, X-rays, and dental procedures. MedPay limits typically range from $1,000 to $10,000, depending on the state and insurer. It is generally recommended to have coverage equal to your health insurance deductible so that MedPay can cover your out-of-pocket medical expenses. If you don't have health insurance, consider a higher MedPay limit to help pay your medical bills after an accident.

To get reimbursed for a medical payments coverage claim, you will need to work with a medical payments adjuster to ensure that all necessary medical records and bills are forwarded. You may also be required to sign a release form or provide proof of identification. The adjuster will review the paperwork and either fully or partially reimburse the appropriate party, request additional information, or deny the claim.

It is important to note that MedPay won't cover situations where your injuries force you to miss work, and you need wage reimbursement. It also doesn't cover injuries caused to other drivers. Additionally, unlike health insurance coverage, there are no deductibles or co-payments with MedPay.

Personal injury protection (PIP) coverage

PIP may also cover:

• Lost wages if you or your passengers are injured and can't work
• Household services such as childcare, house cleaning, or yard work
• Disability and rehab costs
• Death benefits (paid to your family if you're in a fatal car accident)

In some states, PIP coverage may include a deductible, with a range of deductible amounts to choose from. The majority of states are considered at-fault states and only require liability insurance instead of PIP coverage, although some at-fault states offer PIP coverage as optional or mandatory.

If the cost of necessary medical care exceeds the auto insurance policy's PIP limits, health insurance may cover further expenses. PIP policies have a per-person maximum, meaning that coverage is limited to a certain amount per person if multiple people are injured in an accident.

Other at-fault party's liability coverage

If you are injured in a car accident and the other driver is at fault, their liability coverage can help pay for your and your passengers' medical expenses and your vehicle's damages. This is known as a third-party claim, and it is filed by someone other than the policyholder or insurance company. In most states, when an accident occurs, one party is usually considered "at-fault" and must cover the injuries of the other driver and their passengers through their liability insurance coverage.

If the other driver is at fault, you can file a claim with their insurance company for your covered accident-related expenses. Their liability coverage can help pay for your and your passengers' medical expenses and your vehicle's damages. However, if the at-fault driver has inadequate or no insurance, you may have to rely on your own insurance policy or pursue a negligence claim to cover your expenses.

In some states, known as "no-fault" states, medical bills are covered by each driver's individual personal injury protection (PIP) coverage, regardless of who is at fault for the accident. In these states, drivers must purchase car insurance with PIP to cover their injuries in an accident. The at-fault driver's insurance typically still pays for damage to the other driver's vehicle and property.

If you are injured in a car accident, it is important to seek medical attention and contact your insurance company as soon as possible. You may also want to consider consulting with a legal professional to help you navigate the insurance process and ensure you receive compensation for your full spectrum of losses, including medical bills, lost income, and pain and suffering.

Uninsured/underinsured motorist (UM/UIM) coverage

Uninsured motorist coverage protects you if you're involved in an accident with a driver who has no auto insurance. Underinsured motorist coverage, which is usually offered alongside uninsured motorist coverage, comes into play when the at-fault driver doesn't have sufficient insurance to cover the damages or injuries they caused. This type of coverage is mandatory in many states and highly recommended for all drivers, as it provides added peace of mind.

UM/UIM coverage comes into effect when the other driver is at fault in an accident but doesn't have sufficient insurance or no insurance at all. In such cases, your UM/UIM coverage will help pay for your injuries, your passengers' injuries, and any damage to your vehicle. This coverage is particularly important in hit-and-run accidents, where the other driver flees the scene and cannot be identified.

There are two main components to UM/UIM coverage:

• Uninsured/Underinsured Motorist Bodily Injury Coverage: This covers medical bills and, in some cases, lost wages for you and your passengers resulting from an accident with an uninsured or underinsured driver.
• Uninsured/Underinsured Motorist Property Damage Coverage: This covers any damage to your vehicle or other property caused by an accident with an uninsured or underinsured driver.

The requirement for UM/UIM coverage varies from state to state. While some states mandate this coverage, others make it optional. It is important to check the laws and requirements of your specific state. Even if your state doesn't require it, insurance experts strongly recommend purchasing UM/UIM coverage to protect yourself financially in the event of an accident with an uninsured or underinsured driver.

UM/UIM coverage is typically very affordable, costing around 5% of your annual auto insurance premium. For example, if your annual premium is $800, adding UM/UIM coverage would cost approximately $40 per year. It is a small price to pay for the added protection it provides.

In conclusion, uninsured/underinsured motorist coverage is a valuable addition to your auto insurance policy. It ensures that you and your passengers are covered for injuries and that your vehicle is covered for damage caused by an uninsured or underinsured driver. By understanding the specifics of your policy and the laws in your state, you can make an informed decision about UM/UIM coverage and ensure you have the protection you need.

Collision Deductible Waiver (CDW)

CDWs cover the policyholder's collision deductible when they are involved in an accident with an uninsured or underinsured driver. The at-fault driver must be identified, and in some states, they must also be uninsured for the CDW to apply. The CDW endorsement cost is generally low compared to the cost of a collision deductible.

Collision Deductible Waiver in California and Massachusetts

In California and Massachusetts, CDWs are state-regulated. In California, collision deductible waivers are called California Deductible Waivers, and insurance companies are required to offer them to policyholders with both collision coverage and uninsured motorist bodily injury coverage (UMBI) on their policy. In Massachusetts, the CDW is an optional endorsement that allows the collision deductible to be waived if the policyholder is involved in an accident caused by an identifiable driver who is uninsured.

A CDW may not apply in certain situations, such as:

• The policyholder is at fault or partially at fault for the accident.
• The policyholder is a victim of a hit-and-run and the uninsured driver cannot be identified.
• The policyholder's insurance company requires them to be 100% fault-free to waive the deductible.

Cost of a CDW

The cost of a CDW depends on the carrier, the amount of the deductible, and the overall policy and driving profile. CDWs for economy vehicles typically cost $10-$30 per day, while for more expensive vehicles, the cost can be significantly higher.

Frequently asked questions