I get calls all the time from people who assure me they have “full coverage”, but when I start asking specific questions it becomes clear that they really don’t know what kind of coverage they have at all. In fact, there is no such thing as “full coverage” in auto insurance. There is instead a wide range of individual coverages you can purchase from your carrier, each intended to protect you against a different risk.
The three most common and important forms of coverage are a liability, personal injury protection (PIP) and uninsured or underinsured motorist coverage.
LIABILITY
Liability coverage is intended to pay damages caused by your negligence. When you cause an accident and injure someone else, your liability insurance protects your assets by providing you a legal defense and paying for the damages you have caused. You should have enough liability insurance to protect you in the event you cause catastrophic damages. If you have a high net worth, you could even consider adding a layer of umbrella insurance on top of your liability coverage.
Although liability insurance is the only coverage required by Washington law, it does nothing to protect you if you are injured in a collision caused by another driver.
PERSONAL INJURY PROTECTION (PIP)
Personal injury protection pays for reasonable and necessary medical bills resulting from an accident, regardless of who is at fault. This is considered a “no-fault” coverage. Unlike health insurance, PIP coverage has no co-pays or deductibles and requires no referrals for specialists.
In Washington, the most common levels of PIP coverage are $10,000 and $35,000. We strongly recommend that everyone pay a little bit more to get the higher coverage. You could go through $10,000 with just an ambulance ride, an ER visit, some diagnostics and a follow-up visit. Having more PIP coverage will help make sure you can get the medical treatment you need.
If you use up your PIP coverage, under Washington law your health insurance becomes primary and will pay your remaining medical bills pursuant to the terms of your policy.
UNINSURED/UNDERINSURED MOTORIST
Although liability insurance is required by Washington law, nearly 20% of the State’s drivers do not have insurance. This puts everyone at risk. If you are hit by an uninsured person, your uninsured motorist coverage will act as if it were the liability insurance for the at-fault driver and will provide you with a chance to recover your medical bills and your pain and suffering.
If you are hit by an underinsured driver (one who has less insurance than the value of your claim), your underinsured motorist coverage provides a layer of insurance above and beyond the at-fault driver’s liability coverage.
It is important that everyone protect themselves with adequate levels of coverage for PIP and uninsured motorist coverage.
OTHER COVERAGES
There are numerous other coverages a person can purchase from their insurer. Often the insurer never mentions these coverages, and you have to ask if you want them.
Comprehensive will pay for incidental damage to your cars, such as chipped or broken windshields, damage from vandalism, and other minor incidents.
Rental car coverage will pay for a rental car if your vehicle needs to be repaired as a result of an accident or some other incident.
Collision coverage will pay to repair or replace your car, less the deductible, in the event it is damaged. This is a no-fault coverage.
There are many other possible coverages available, and every consumer should be aware of and consider every available option when negotiation and purchasing auto insurance.
CHECK YOUR COVERAGE NOW
Pull out your auto insurance policy now and see what kind of coverage you have. If there is something that needs to be added or increased do it now before you need it. It may cost you a few more dollars each month, but you’ll be glad you did it if you’re ever injured in an accident.