Attorney P. Christopher Guedri

As a lawyer who specializes in the handling of personal injury claims, I often encounter clients that have been injured in serious motor vehicle accidents. Over the years, I have found that many clients don’t know what types of coverage they have on their vehicles, the amount of the coverage they purchased, or how the answers to these questions may impact their case or our handling of it. In this article, I will attempt to generally outline the types of coverage that are typically available to purchasers of auto insurance and how to best protect yourself and your family in the event of a motor vehicle accident.

Bodily Injury Liability Coverage
Bodily Injury (BI) Liability Coverage protects the owner or driver of a vehicle for all sums which the insured becomes legally obligated to pay because of bodily injury to an injured third party. This coverage also pays defense costs against legal actions. Bodily injury liability limits are often split. The first figure is the limit of payment to a single person per accident and the second figure is the limit of payment in total for all persons injured in a single accident. For example, bodily injury liability limits of $100,000/$300,000 means the maximum amount that an insurance company can be called upon to pay on behalf of its insured is $100,000 to any one person injured in a single accident. This limit also means the insurance company will pay no more than a total of $300,000 to all persons injured in a single accident, regardless of how many persons are injured. This type of coverage will protect you and members of your family from being personally liable up to the limits of the coverage, should you or a family member negligently cause an accident that results in bodily injury to another.

Property Damage Liability Coverage
Insurance policy limits are often cited with three numbers. The third number is the Property Damage (PD) Liability Coverage. This coverage is similar to Bodily Injury Liability Coverage but is limited to damage caused by you to another person’s property, such as an auto, fence, telephone pole, garage or dwelling. As the name indicates, this coverage is limited to damage caused to property, and does not include injury to persons. This coverage will protect you or a family member who negligently causes damage to or destruction of another’s property.

Collision Coverage
Collision Coverage, if purchased, protects your vehicle against direct and accidental loss or damage as a result of a collision with another vehicle or fixed object. This coverage is optional. Collision Coverage obligates your insurance company to repair or replace the insured vehicle if damaged or destroyed by a collision with another vehicle or fixed object.

Comprehensive Coverage
Comprehensive coverage, also known as “other than collision coverage” obligates your insurance company to repair or replace your vehicle for damage or destruction resulting from an event other than a collision with another vehicle or fixed object. For example, damage is covered resulting from vandalism, riot, flood, wind and hail, fire or theft. This coverage is also optional.

Medical Expense/Medical Payments Coverage
Medical Payments (MP) Coverage is insurance coverage that pays up to a specified amount for medical expenses incurred as a result of a motor vehicle accident. This coverage pays regardless of who is at fault. “Med pay” and “med expense” coverage is typically provided in increments of $1,000, $2,000, or $5,000. In Virginia, a statute requires that med pay/med expense coverage is automatically “stacked” to provide the policyholder with the stated benefit multiplied by the number of vehicles insured under the policy up to a maximum of four (4). For example, if you have a limit of $2,000 and three vehicles on the policy, you actually have a limit of $6,000 available to you.

Uninsured Motorist Coverage
Uninsured Motorist (UM) Bodily Injury Coverage protects you and any occupants of your vehicle for bodily injury up to your policy limits as a result of an accident with a legally liable uninsured motorist or hit-and-run driver. This coverage protects an “insured” under the policy in the event that one of them is injured as a pedestrian. It also covers an “insured” while occupying a motor vehicle who is injured as a result of the negligence of a driver that is uninsured, or a driver who leaves the scene and is never identified. In Virginia, for example, a person who buys automobile insurance receives the same amount of uninsured motorist (UM) coverage as they have purchased bodily injury liability insurance unless they specifically request uninsured motorist coverage that is less than the liability coverage they purchased. The theory for this is that a policyholder should have the same rights to collect from their own insurance company if they are injured as a result of the negligence of an uninsured motorist as they have protected themselves against liability to a third party that may be injured as a result of the policyholder’s negligence.

Underinsured Motorist Coverage
Underinsured Motorist (UIM) Coverage is very similar to uninsured motorist coverage except that it provides coverage to an “insured” under the policy who is injured by someone who does have auto insurance but whose liability insurance limits are less than the uninsured motorist (UM) limits that the policyholder has secured. For example, if you, the policyholder, have purchased uninsured motorist (UM) coverage of $300,000 per person and are seriously injured by a motorist who has only $100,000 per person of available liability insurance, then you can make a claim against your insurance company for the difference between your uninsured motorist limits and the at-fault driver’s liability limits. In this example, you could collect $100,000 from the negligent driver’s liability insurance company and then collect up to $200,000 from your own company under the underinsured motorist (UIM) coverage you have.

Towing and Labor Coverage
If your vehicle is temporarily disabled on the road, this coverage will pay your actual expense up to the amount of coverage you select and pay for to have your vehicle towed or for roadside labor to repair your auto.

A Word To The Wise . . .
With skyrocketing medical expenses, the costs associated with a serious injury can be very high. Medical expenses for a routine hip surgery, for example, can exceed $75,000 when the total costs of a four day hospital stay, the surgical fees, anesthesia costs, post-operative follow up care, and physical therapy are added together. Since an injured person’s medical expenses are a large part of what they are entitled to collect when injured as a result of the negligence of someone else, we often encourage clients to obtain at least $300,000 of liability insurance. This amount of coverage will protect you or a family member from liability to a third party up to a maximum of $300,000.

Unless specifically rejected, with that limit you will automatically receive the same amount of uninsured and underinsured (UM & UIM) protection for injuries and losses that you or a family member may receive as a result of an accident involving an uninsured or underinsured motorist. We also encourage our clients to secure the optional med pay or med expense (MP) coverage as this coverage will reimburse the policyholder and its family members for medical expenses incurred as a result of an accident regardless of who is at fault and, in Virginia, independent of whether the person also has hospitalization insurance which will pay the health care providers directly.

Collision coverage, comprehensive coverage, and towing coverages are optional. We would suggest that you consult with your insurance agent regarding the cost of this coverage to determine if it is protection that you want and are willing to pay the premium for.

I hope this article is helpful to you and your family in making your coverage decisions regarding your auto insurance. Being well insured is your best protection against the consequences of a serious accident – whether you are at fault or you are the victim.

About the Author: Chris Guedri is a personal injury attorney in the Richmond office of Allen & Allen. Since joining the firm in 1991, Chris has focused his practice on car accidents, trucking accidents, products liability, and premises liability litigation.

Attorney Elizabeth M. Allen

How much automobile insurance should you buy?

The answer is easy: As much as you can afford.

The primary reason to buy automobile insurance, both liability and uninsured motorist (UM) coverage, is to protect you and your assets. Your insurance company will almost never pay more in damages, to you or to a person you negligently injure, than the dollar amount of the coverage you paid for, no matter how high a verdict there may be either against you or for you. Sound complicated? I’ll illustrate with two hypothetical examples, one involving liability insurance coverage and one involving underinsured motorist coverage.

Liability Coverage Example
Suppose you buy a policy with limits of $25,000/50,000 in auto liability insurance coverage.2 As a result, you would be personally responsible for payment of the remaining $50,000! The injured person would likely seek to recover this amount from your savings and other assets. This is a harsh result, I am sure you would agree, and one you would want to avoid.

What would happen if you had purchased a policy with higher limits of $100,000/$300,000? Since the verdict is less than your limit, your insurance company would pay the injured person the entire judgment amount of $75,000. Consequently, you would not be obligated to pay any part of the judgment yourself. To sum it up, the more insurance coverage you buy, the less likely it is that you will ever be called upon personally to pay any part of a legal judgment against you.

Underinsured Motorist Coverage (UIM) Example
Your purchase of high insurance limits can also help you or your family members when one or more of you are injured through the fault of another driver. This might occur if you and/or relatives who live with you sustain serious injuries in a motor vehicle accident, and the negligent driver who caused the accident has less insurance coverage than you do.

How does this work? Suppose you were in an auto accident that was someone else’s fault, and you were injured. Suppose your injuries and losses are serious, and your medical bills and lost wages are substantial. In your lawsuit against the driver at fault, a jury awards you $100,000 in damages. /Now suppose the driver at fault has purchased an auto insurance policy with $25,000/$50,000 limits, and you have an auto insurance policy that provides $100,000/$300,000 limits in UM/UIM coverage. The at-fault driver’s insurance company will pay you only $25,000, which is the maximum amount of liability coverage the defendant bought which can be paid to one person with respect to one accident. (When limits of insurance coverage are stated as “$25,000/$50,000, the first number is the maximum amount the insurance company will pay to any one person injured in an accident, and the second number is the maximum amount the insurance company will pay to all claimants in a single accident, regardless of how many injured persons there are).

However, you can look to your own UM/UIM coverage to see if there is underinsurance coverage (UIM) available to you. Under Virginia law, if the limit of the UM coverage available to you is greater than the limit of the at-fault driver’s liability coverage, then he is considered “underinsured” with respect to you and you will have underinsurance coverage on your own policy to give you extra coverage.3 The availability of underinsurance coverage depends on a comparison between a specific at-fault driver’s total liability coverage, and the total limit of UM coverage on the injured person. (Sometimes either the at-fault driver or the injured person may be able to add together or “stack” several insurance policies). In the example above, since the verdict is $100,000 and the at-fault driver only has $25,000 liability coverage, his insurance company would pay the first $25,000 of the verdict. Then your insurance company would pay you $75,000 under you UIM coverage, because that’s the amount by which your own UM motorist coverage exceeds the at-fault driver’s liability coverage limit of $25,000. By adding your $75,000 in underinsurance coverage to the defendant’s $25,000 liability limits, the entire $100,000 judgment you won in court would be paid in full.

Now suppose instead that you had only purchased an auto insurance policy with a $25,000/$50,000 limit in UM coverage. In the accident described above, your insurance company wouldn’t pay you anything because your UM insurance coverage of $25,000/$50,000 is not any higher than the at-fault driver’s own $25,000/$50,000 liability limits. Yes, you can still pursue the at-fault driver personally through collection after trial. However, the average at-fault driver has few assets and collecting on a judgment can be a long, expensive, and often futile endeavor. In the end, it is always better to carry high liability/UM insurance limits yourself and ensure that you and your own family are protected in the event one or more of you sustains severe injuries caused by the negligence of a driver with low automobile insurance coverage limits.4

2 When you see a figure like $25,000/$50,000 in relation to an auto policy, it means the limits are “split”, that is, one injured person can recover a maximum of $25,000 under the policy while $50,000 is the most coverage the insurance company will pay out to all injured persons regardless of the number of people injured in the same accident or how badly they may be injured.

3 In Virginia, you may be entitled to undersinsured motorist coverage under more than one policy, and these policies can sometimes be “stacked” to give you more coverage. Va. Code § 38.2-2206. This is a complex area of law, and it is wise to consult an attorney to explore whether there is underinsurance in your case.

4 In Virginia, you cannot buy UM coverage in an amount that is higher than your auto
liability insurance limits.

About the Author: Elizabeth Morrell Allen has been engaged in the practice of personal injury law for over 30 years at the law firm Allen & Allen. From 1988 to 2004, Beth served as a branch manager of the firm’s Petersburg, Virginia office.

What About My Car?

You may or may not have had severe injuries after your unfortunate car or truck accident but WHAT ABOUT YOUR CAR? If your car was damaged and the accident was not your fault, here are some guidelines to help you in dealing with the insurance companies and getting your car repaired.

What is covered?
You are entitled to payment for any damage done to your car and personal property, such as, clothing, eye wear, sports equipment, or personal belongings that were in your car at the time of the accident if the accident was entirely someone else’s fault. Items that may have been lost or stolen from your car are not covered.

How am I paid for damages?
You may be able to recover your losses from the following three sources:

Liability Coverage under the Defendant’s Insurance - If the other person’s insurance company accepts fault in your accident, they will normally pay a standard amount to have your car repaired. Unfortunately, insurance companies often take days or weeks to decide whether to accept fault in the accident. Therefore, your car may not be repaired in a timely manner.

Collision Coverage under Your Insurance - This is usually the fastest and easiest way to get your car repaired. Your car repairs will be paid under your own insurance policy regardless of who is at fault in the accident. You are responsible for paying any deductable up front. This deductable will be returned to you if your insurance company is repaid by the other party.

You may also be responsible for any rental car fees during the time your car is being repaired if you do not have rental reimbursement coverage under your own policy.

Uninsured Motorist Coverage under Your Insurance - If the person who caused the accident does not have any insurance or is not able to be identified, you are protected under the uninsured motorist coverage of your own policy. Depending on the type of accident, you may be responsible for paying a deductible.

How do I get my car repaired?

If your car is drivable – You should contact the other party’s insurance company to ask for an estimate of the cost of repairing your car. An insurance adjuster may arrange to come by and look at your car or you may be asked to take your car to the insurance company’s location. Once you get an estimate from the insurance company, take your car to a body shop of your choice for a second estimate. If the body shop feels the repairs to your car cannot be repaired as estimated by the insurance company, ask the Manager of the body shop to call the insurance company on your behalf. The insurance company will then issue you a check to the body shop to pay for the repair to your car.

Some insurance companies do not have local estimators and will ask you to get 2-3 estimates from local body shops for repairing your car. They will then issue you a check for the lowest estimate.

If your car is not driveable - The insurance company will send an adjuster to estimate the damage to your car. They will then issue a check to pay for the repairs. If your car has been towed to a repair shop or salvage yard, it is very important to have your car moved as quickly as possible to the body shop of your choice. Most of these locations charge a daily storage fee that you may be responsible for paying.

What if my car is “Totaled”?
The insurance company will compare the amount your car could have been sold for before the accident (fair market value) to the estimated cost of repairing your car (plus rental charges and salvage value) and pay you whichever amount is less. A car that costs more to repair than it was worth before the accident is called a “Total Loss”. The fair market value of your car is determined by the current price for a car similar to yours as listed by area car dealerships, newspapers, dealers surveys, and car value books.

When your car is declared a total loss, you have two options:

1. You can accept the total loss value of your car less the salvage value and keep your car.

or

2. You can accept the total loss and salvage value of your car by signing your car over to the insurance company. You will be required to sign the title and odometer reading statement. You may also be asked to sign a power of attorney to allow the insurance company to dispose of your car.

Rental Cars
While your car is being repaired or you are waiting on payment for a car that is a total loss, you may want to rent a car. Provided the rental is comparable to your car, rented at a reasonable price, for a reasonable amount of time, the insurance company will reimburse you. Under the law in Virginia, the insurance company must only reimburse your expenses; therefore, you are often responsible for renting and paying for a rental car in advance.

Insurance companies often argue the amount of time a rental car is used, so it is important that you follow up with the body shop to make sure your car is repaired in a timely manner.

Conclusion
We hope you find this information helpful in resolving the damages to your car. If your injuries are serious and you feel you need an attorney, please call Allen, Allen, Allen & Allen for a free consultation at 866-388-1307.

This guide describes how to handle your property damage in general. Please note that your insurance company may follow different procedures.