We have a problem with ensuring people who are injured as a consequence of another’s negligence are fully compensated and made whole for their losses, damages and harm in Ohio. And the problem lies with both the automobile and homeowner’s insurance industry.
Unless you see the horrible effects personally, most people go through their lives believing that insurance is just another payment to try and economize on like anything else — and this is where the insurance industry provides a disservice. Insurance companies compete for your business by offering “low rates” on premiums and “bundled coverage packages” with the express aim at saving IT money, not you. But all it does is reduce coverage for when those who need the coverage need it most.
Everyone is aware that driving is likely the most dangerous activity that any of us engage in (sky divers and other thrill seekers being excluded). There are more people injured in car crashes than most other injury causing incidents. In addition, most people often overlook the true number of people hurt in car crashes and instead consider it a convenience, necessity and yes, even a pleasurable or sporting activity. Furthermore, it is a given that no matter how careful we are when behind the wheel, we can never control what the other drivers are doing or not doing. Additionally, while we can control what insurance we purchase, we cannot control how much or even if the other driver has insurance to cover all the losses, damages, and harm he or she may have caused. Furthermore, the term “full coverage” is meaningless since what “full coverage” means changes from driver to driver. In other words, what may fully cover the losses, damages, and harm one driver may cause may not cover another driver’s.
So what does “full coverage” actually mean? It means that if you are in a car crash with another driver will you be able to fully compensate the other driver’s losses, damages, and harm to you or will the other driver’s insurance be able to fully compensate you for your losses, damages, and harm. If there is not enough insurance coverage to fully compensate the losses, damages, and harm suffered by either you and yours or the other driver and hers, you do not really have “full coverage” even thought the insurance company claims you do.
So when you speak to your insurance agent and you ask him for “full coverage,” you should be sure that he understands that what you mean by the term “full coverage” is sufficient insurance that not only covers those who may be harmed by your negligence but also covers you for the losses, damages, and harm you and yours suffered as a direct result of another’s negligence.
For example, I am aware of someone who was a successful financial advisor, owned a $1,000,000 home in the suburbs, owned expensive cars, and had a teenager driving a new expensive vehicle he also owned, whose daughter was in a car crash caused by another driver and suffered very serious and profound injuries as a direct result. Before the crash, he had an automobile policy of $250,000/$500,000 liability and uninsured/underinsured motorists coverages and a $2,000,000 umbrella policy that included uninsured/underinsured motorists coverage. Coverages that would have fully compensated him for his losses, damages and harm he suffered. Unfortunately for him and his family, when he went to renew his insurance, the insurance company’s agent convinced him to save $125 per billing cycle by only carrying $100,000 in uninsured/underinsured motorists coverage and completely dropping the umbrella coverage for uninsured/underinsured motorists coverage claims.
You can probably predict what happened. The driver who caused the car crash was an uninsured driver. After several surgeries, follow up rehab that took more than six months and medical bills that exceeded $175,000, she still had to quit all of her competitive high school sports activities due to the permanent injuries she sustained. Indeed, her life was forever impacted as a consequence. Since she could not make a claim against the responsible driver since he had no insurance to cover the losses, damages, and harm he caused, she and her parents turned to their own insurance company to obtain full compensation. However, instead of receiving full compensation, their automobile insurer sends them a check for $100,000 and is thereby completely done with their claim. This example begs the question — did her parents really purchase “full coverage?” The answer is evident. They did not!
Therefore, one must ask what kinds of insurance coverages are available to be purchased to ensure you truly have “full coverage.” I have already discussed the importance of liability insurance that is adequate to cover a loss you cause without exposing your personal assets to a potential judgment. I also have discussed the need for Uninsured/Underinsured Motorist coverage in one’s automobile insurance policy that will be sufficient to fully compensate you in the event the other driver who caused the crash does not have adequate coverage limits to fully compensate you and yours for all of your losses, damages and harm. But the above coverages are not the only coverages you should consider if you truly want to have “full coverage” that fully protects you and your family. Coverage that will enable you to recover full compensation for all losses, damages, and harm suffered.
The answer to the above question is that you should have coverage that eliminates any reason for someone to go after your personal assets. Additionally, you should have uninsured/underinsured coverage that ensures you and your family will be fully compensated for the losses, damages, and harm caused by another who does not have any or even adequate insurance coverage.
Thus, if you own or rent a home or apartment, you should also consider purchasing an umbrella policy that includes Uninsured/Underinsured Motorists coverage at an amount you determine based upon your individual situation. Although you will be required to maintain specific coverage amounts under both your automobile insurance policy liability and uninsured/underinsured coverage to obtain uninsured/underinsured coverage under your homeowner’s umbrella, you will be pleasantly surprised at how inexpensive an umbrella policy that includes Uninsured/Underinsured Motorists coverage premium is compared to the premiums for your automobile insurance policy. For most of us, one million ($1,000,000) dollars of coverage under an umbrella is probably the lowest coverage you should purchase for an umbrella that covers losses, damages, and harm caused by either an uninsured or underinsured driver.
If I had a dollar for every time a client told me “don’t worry, I have full coverage,” I could have retired years ago. Indeed, if I had a dollar for every time a client responded to my request for their insurance information, with the refrain “why do you need my insurance, won’t the insurance company for the at-fault driver cover my damages?,” I could have retired even sooner.
The reality is that most of us are woefully underinsured. And the wrong time to find out you are not fully covered is after an accident. The good news is that most crashes are property damage-only fender benders. However, for those occasional bodily injury claims, a ride in a standard ambulance can run $1,500 and even more for a Life Flight. A simple ER visit with x-rays is easily $10,000 in most hospitals. If you are admitted to the hospital (not even considering surgery), the cost can start at $15,000 and even be more than $25,000 per day! Adding the loss of a totaled vehicle and a week or more off work, what most people think of $100,000 per person and $300,000 per crash as “full coverage” clearly is not.
If you are still skeptical after reading this article, I encourage you to speak with a lawyer who handles bodily injury claims arising as a result of a car crash. Ask that lawyer how much coverage she has. Of course, one could go a lifetime and never be in a crash or make a claim. But does the insurance company ever send a check for the decades of faithful premium payments as a bonus for when no claims have been made? Of course not. Your concern should be whether or not the alternative is worth the risk of paying a little higher premium to be sure you and your family members have “full coverage?”
The information contained in this article is intended to provide only general legal information and is not intended to be relied upon for specific legal issues or any particular legal matters. For specific legal issues or any particular legal matters, the reader is advised to consult with and secure the legal advice of an attorney of their choice.