Two Things You Should Know About Auto Insurance

PLEASE NOTE: This article is not intended to be legal advice, and is no substitute for speaking with a licensed attorney. If you have been injured in a motor vehicle accident and have questions, please contact an attorney. You can reach our office at (360) 733-3966.

Auto insurance is required by law in Washington State, and most of us are familiar with the basics. There are large policies that provide liability coverage up to $1 million or more, and there are “minimum” policies that provide just the required $25,000 in liability coverage. Although we absolutely recommend purchasing as much liability coverage as you can realistically afford, this article is not about liability coverage. Rather, we want to highlight two optional types of coverage that may not cost as much to add to your policy as many consumers assume.

The first is “Personal Injury Protection” (also known as “PIP”) coverage. This is coverage under your own auto insurance policy that will pay your medical bills or those of your passengers up to a certain amount, regardless of whose fault the accident was. In other words, if you are rear-ended by a drunk driver and find yourself with mounting medical bills, if you have PIP coverage, your own insurance company will simply pay those medical bills as you incur them. Without it, you might have to pay them on your own while you wait to try to resolve the liability claim against the at-fault driver’s insurance (that is, if they have insurance—see the discussion in the next paragraph for more on that). Even in the best-case scenario, without PIP coverage you will still have to pay all co-pays, deductibles, and other charges under your personal health insurance policy, and that policy may not cover the type of treatment that you need (such as physical therapy, chiropractic care, or specialists).

Most PIP policies will pay medical bills up to $10,000 following an accident. What many consumers do not know is that adding PIP coverage to a basic liability insurance policy may not increase the premiums all that much. When you buy insurance, often you are paying primarily for the liability coverage. Adding supplemental coverage such as PIP may not cost as much as you think. We strongly recommend talking with your insurance agent or insurance company to be sure that you have PIP coverage. If you do not, it is worth checking to see what it would cost to add it.

The second type of coverage that can be absolutely essential in many situations is “Underinsured Motorist Coverage” (or “UIM” coverage). This is coverage that will allow you to recover fair compensation even if the person who was at fault for the accident did not have insurance coverage. You would be amazed at the number of drivers out there who do not have liability coverage at all, even though it is required by law. In the example above, if the drunk driver who rear-ended you did not have insurance coverage, and if you did not have UIM, you would likely be left paying all of your medical bills and expenses on your own. Even if you had $50,000 in medical bills and a serious injury that might be worth hundreds of thousands of dollars in a personal injury claim, you would be unlikely to recover even a penny without your own UIM coverage to work with.

Just like PIP coverage, UIM coverage is not as expensive as many people assume. Depending on how much coverage you buy, it may only be a minimal increase in your premium payments. We strongly recommend carrying at least $100,000 in UIM coverage at all times. At the very least it is worth chatting with your insurance agent or insurance company to see what it would cost to add it or increase the coverage.

Again, you should be aware that it is generally not terribly expensive to add these options to your auto insurance. And while we hope you never need these types of coverage, you will be very happy to have them if you do.