How limited insurance can lower your recovery

In Virginia, drivers are not required to have auto insurance so long as they pay a fee to the DMV. For all drivers that do have auto insurance, the minimum coverage that drivers must have is as follows:

  • Bodily injury/death of one person $25,000
  • Bodily injury/death of two or more persons $50,000
  • Property damage $20,000.

calculating insurance, coins, pens and paper

So what does limited coverage mean?

If the at-fault driver has a minimum policy, the most that the other driver’s insurance company is required to pay is $25,000. This also means that if you maintain a minimum policy and your bodily injury claim exceeds the value of the insurance coverage, you could be unprotected. That is what’s known as limited coverage – where the value of your claim is greater than the available insurance coverage.

Limited coverage only applies where the value of your claim exceeds the value of the available insurance. Many claims handled by the attorneys at Allen & Allen fall under Virginia’s minimum policy limits. However, limited coverage can affect your recovery even if you have more than a minimum policy. For example, if you obtain an insurance policy of $100,000 but you are seriously injured, and the value of your personal injury claim and/or medical bills exceed the insurance coverage available, you still have limited coverage.

Can I recover from the defendant personally?

Typically, no. It’s difficult to collect personal assets from any defendant in Virginia. Worse, you could obtain a judgment against a defendant and the defendant could then declare bankruptcy, making any assets nearly impossible to retrieve. For most, recovery above the insurance limits available is highly unlikely.

How can I prevent not having enough coverage?

You can protect yourself in two ways. First, obtain more insurance for yourself. The single largest way to avoid a limited coverage situation is to have the most insurance your budget can afford. Auto insurance policies are typically sold in certain increments ($25,000, $50,000, $100,000, $250,000, and upwards) but some insurers may offer more tailored plans. The second way to protect yourself is to obtain Medical Payments Benefits. Medical Payments Coverage (or Medpay) is an added benefit in your auto insurance plan for out-of-pocket medical expenses.

There are two advantages when opting for Medpay coverage: (1) You can collect the money quickly (not at the end of your case) as part of a settlement and (2) You can collect the money in addition to whatever you may recover from the at-fault driver. You can read more about Medical Payments Benefits here and here.

Do not assume that if you’re injured, that you will automatically recover the full value of your personal injury claim. Limited coverage is one of the many reasons it’s important to consult an attorney if you are injured in an auto collision. The attorneys at Allen & Allen handle these types of situations daily, and can determine the insurance coverage available to help you maximize your recovery. Contact us for a free consultation at 866-388-1307.