If you are like most people, you don’t read much of what your auto insurance company sends you. The policies are written in a way that is difficult to understand. And contrary to popular belief, there is no such thing as “full coverage.”
Liability coverage protects you if you are at fault for causing the accident. This coverage will pay damages for bodily injury and property damage. Since liability coverage protects you and your personal assets, it is one of the most important coverages you can buy. Washington law only requires that you have minimum bodily injury liability limits of $25,000 per person/$50,000 per accident. No matter how many people are injured or how serious the injuries are, the per accident limit is the maximum amount of coverage available to protect you. These minimum limits are often insufficient to cover the damages caused by a serious accident, especially with medical costs skyrocketing. If your liability insurance limits are not sufficient, the person injured by you may come after your personal assets. For you own protection, you should thus buy the highest liability coverage limits you can afford. Purchasing high liability limits is also important because these limits will also determine the amount of underinsured motorist coverage (UIM) available to you.
PIP pays for medical expenses and wage loss for you and other passengers in your car, regardless of who caused the accident. It also covers pedestrians and bicyclists who are injured in an accident with you. Although you are not required to purchase PIP coverage, it is not only recommended that you do so, but you should buy the maximum amount of PIP coverage available. PIP coverage provides for payment of medical expenses, wage loss benefits, burial expenses, and other services such as home nursing care and domestic help during recovery from an injury. State law requires that PIP coverage be offered and that it meet certain minimum requirements. You will automatically have PIP coverage, unless you reject this in writing. Despite the trend toward making PIP coverage more available, many insurance companies are becoming increasingly aggressive in restricting payments for treatment they consider “unreasonable” or “unnecessary.” For instance, insurers are increasingly likely to attempt to cut off PIP payments before one year when chiropractic care is involved. Usually this is done by them demanding that you attend an “Independent Medical Examination” (IME) with a doctor of the insurance company’s choosing. If you refuse to attend such an examination, your PIP benefits will also likely be suspended or terminated. You should immediately talk to a lawyer if your insurance company attempts to restrict your PIP coverage following an accident, or demands that you attend an IME.
Despite the fact that auto insurance is mandatory in Washington, many people nevertheless drive without any insurance or without adequate insurance to fully compensate an injured person. As noted above, mandatory insurance laws require liability coverage of only $25,000 per person/$50,000 per accident, which given rising medical costs is often insufficient to cover the damages caused by a serious accident. Underinsured Motorist Coverage (UIM) covers you against damages caused by an uninsured or underinsured motorist, up to the amount of the UIM coverage purchased. This coverage also extends to you or members of your household who may be injured by an uninsured/ underinsured motorist while you are a pedestrian or riding a bicycle.
That’s why it’s important, if you experience an injury or loss caused by a driver who is uninsured or underinsured, to have your own UIM. UIM coverage is considered so important that the law requires insurance companies to offer it to all customers. RCW 48.22.030. The amount of UIM coverage offered must be the same amount as your liability coverage unless you make a written required for less coverage. Again, UIM coverage will exist by law unless it was rejected by you in writing.
Collision coverage pays for damage to your vehicle from an accident regardless of who may be at fault. Collision coverage pays for repair or replacement of a vehicle, up to the fair market value of the vehicle, subject to a deductible which may range from $250 to $1,000. You can reduce the cost of this coverage by choosing a higher deductible amount. Your cost can also be reduced by not carrying collision coverage on older vehicles which have lower values.
This coverage protects your vehicle from damage caused by fire, theft, vandalism, weather, glass breakage and contact with an animal. Note, however, that this coverage usually does not cover such “portable” items as cassette tapes, CDs, personal music devices (iPods, etc.), tape decks or cell or car phones. Coverage for these items can typically be added by specific endorsement.
Other coverage which is typically offered includes towing and car rental. For a small additional cost, these benefits are usually worthwhile to have on your policy, as towing and car rental costs can be substantial if you are hit by an uninsured driver and have no other way to obtain coverage for these items.
Generally, if married, it is wise to have both a husband and wife listed as named insureds on your auto policy because under some policies there is broader coverage for named insureds than for other persons insured under the policy, such as non-spousal family members or other residents of the household. Similarly, if you cohabitate with another, and regularly drive their vehicle, or if it is available for your regular usage, you need to be a named insured on the vehicle’s policy, or you may not be covered if you cause an accident while driving such vehicle.
Although a policy usually only has one or two named insureds, there can be a limitless number of “other insureds” under a policy. The language of the policy tells you who the other insureds are. Family members of a named insured are generally considered as insureds under the typical automobile insurance policy. There may be limitations, however, requiring that the family member be related by blood, marriage, or adoption and a resident of the same household as the named insured. Children temporarily away at college are usually covered under their parent’s policy. Unmarried cohabitants are usually not considered members of the same family, and thus, as noted above, should be added to the policy if they will be using the vehicle to ensure that they will be covered. Coverage is also normally extended to anyone who uses an insured vehicle with the permission of a named insured as long as their operation of the vehicle is within the scope of the permission at the time of the accident.
If you buy a new vehicle, it is generally covered under your existing auto insurance provided that: (1) all of your vehicles are insured by the same company; and, (2) so long as you add the vehicle to your policy within 30 days of the date you acquire it. You will have only the same coverage(s) as with your existing vehicle(s), so it is important that you consider adding additional coverages such as collision, or increasing your limits, when you trade in an older vehicle for a newer, more valuable one.
This coverage can vary greatly. Generally, a vehicle that is temporarily being used because of a breakdown or servicing of an insured vehicle will be insured under your auto policy. A rental vehicle will often – but not always – qualify as a temporary substitute vehicle. Be sure to check your policy for what coverage applies to your use of a rental car. Also, remember that vehicles which are provided to you for your work by an employer are almost never covered under your personal auto policy, so be sure that your employer has insurance in place on the work vehicle. If you regularly drive a vehicle provided by your employer, ask them to be sure they have and maintain UIM coverage on the vehicle, as usually your own UIM coverage will not apply to a work vehicle not owned by you. If the employer does not have UIM coverage on the work vehicle, ask them to add it. If your employer cannot provide UIM coverage, you can typically buy your own endorsement to add UIM coverage to a vehicle you don’t own, and should do so.
Duties After an Accident>