The economic news is going from bad to worse and we find ourselves looking over our shoulder for what comes next. What comes next could be an out of control car coming into your lane.
There’s not much you can do to prevent a car crash caused by someone else, but there is a lot you can do to protect yourself from the consequences of being hit by an uninsured or underinsured motorist.
The economic downturn has increased the number of uninsured cars on the road. According to The Insurance Research Council, in 2003 14.9% of cars on the road were uninsured. As the economy improved, that dropped to 13.8% by 2007. However, as the economy has weakened, the percentage of uninsured cars on the road has started back up. For each 1% increase in the unemployment rate, the Insurance Research Council has found a ¾% increase in the uninsured motorist rate. By 2010, 16.1% of all cars on the road are expected to be uninsured.
So what can you do to protect your family against an uninsured motorist? The first thing you can do is to find and read the Declarations page of your family automobile insurance policy. The Declarations page is often the opening page of the policy. It has the name of the insurance company at the top, your name and address as the insured, and a listing of all the vehicles insured by the policy. Near each vehicle listed you will find the coverage provided by the policy.
The next thing to do is to determine whether you have sufficient limits of insurance coverage on your policy. The two basic coverages on every policy are Liability Coverage and Uninsured/Underinsured Coverage. The first listed is Liability Coverage, usually listed in an amount such as 25/50, 50/100, or 100/300. This means that if you are at fault and hit someone, the company will pay up to these limit amounts multiplied by $1000. For example, 25/50 means your insurance company will pay up to $25,000 for any one person injured in the accident, and up to $50,000 total for all persons injured in one crash. 25/50 is the minimum limits required by Virginia law and the minimum you can have, but $25,000 does not go very far in these days of expensive medical care.
The other required coverage is Uninsured Motorist and Underinsured Motorist Coverage (UM/UIM). Your insurance company must provide UM/UIM limits equal to the Liability limits, unless you choose lower UM/UIM limits. That is a terrible idea; you don’t want to do that. UM/UIM Coverage is all that stands between you and possible financial disaster if you or a family member are seriously hurt in a car crash.UM/UIM coverage obligates your company to step in and provide insurance up to your UM/UIM policy limits if the other driver who causes injury has no insurance or has a lower limit than you do. UM/UIM coverage covers every member of your household even if you or another member is hurt as a passenger in someone else’s car.
So look at your UM/UIM coverage. What if you were badly hurt in a crash and couldn’t work for several months? Is the amount of your UM/UIM coverage adequate to compensate you for your injuries and losses? If not, call your agent and ask about increasing the limits. The cost of additional coverage is surprisingly little when you consider the next out of control car may not be insured.