Auto Insurance: Cutting Corners Could Cost You

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By Edgar Snyder, Esq.

Another year has begun, and the economy is still unpredictable. Nearly everyone is looking for ways to pinch pennies, and people who are widowed or divorced may be scaling back their finances. Cutting coverage from auto insurance policies is common, but it could cost you thousands.

Even though it’s illegal to drive without car insurance, nearly 14% of drivers don’t have it. If you’re ever in an accident, you need to have adequate coverage to protect your financial security – especially as someone divorced or widowed. You can make changes to your auto insurance policy at any time, so there’s no better time than now to make changes to protect your legal rights.

Reviewing Your Auto Insurance Policy

If you’re not sure how much coverage to choose, here are some guidelines to help you understand the options available to you:

Tort

In Pennsylvania, you have the option of selecting Full Tort or Limited Tort. If you choose Full Tort coverage, you can collect money for pain and suffering if you’re injured in an accident, as well as compensation for medical payments, lost wages, and property damage. Limited Tort doesn’t allow you to collect money for pain and suffering.

Recommended coverage: Full Tort

Bodily Injury Liability

Bodily Injury Liability covers any claims against you if you’re found legally responsible for causing an accident. In Pennsylvania, you must have $15,000 per person, and $30,000 per occurrence of coverage. However, that’s rarely enough to cover a person’s medical bills, and you could be held liable for his or her injuries if you don’t have enough coverage.

Recommended coverage: $100,000 per person; $300,000 per occurrence

Medical Expense Benefit

This benefit pays for your own medical bills if you are injured in an accident. Pennsylvania requires you to have $5,000 of coverage. The types of medical expenses covered will be listed in your policy.

Recommended coverage: $10,000

Collision Insurance and Comprehensive Insurance

Most banks that hold the title to your vehicle require you to have these two coverages. Collision Insurance pays for damage to your car that occurs from a collision or from overturning. Comprehensive Insurance covers damages if your car is stolen or damaged by fire, flood, hail, or other causes besides collisions or overturning. Know that these two types of coverage don’t automatically cover every type of collision or damage to your car – read the policy carefully so you know what is covered.

Uninsured Motorist/Underinsured Motorist

These two types of coverage will protect you if you’re in an accident involving a person without car insurance or without enough coverage on his or her own policy. Uninsured and underinsured motorist coverage is not required in Pennsylvania, but it is crucial to protect yourself and your financial security if you’re ever in an accident – whether it’s the other driver’s fault or not. Be careful what you sign, because you could be waiving your UM/UIM coverage.

Recommended coverage: $100,000 per person; $300,000 per occurrence 

Property Damage Liability

Property Damage Liability coverage provides money to pay claims if your car damages another person’s property. Pennsylvania law requires a minimum of $5,000 of coverage, but if you damage another person’s house or personal property, you can exceed that amount quickly.

Recommended coverage: $25,000

Income Loss

Income loss coverage can help you recover some of your wages if you’re injured in an accident and you can’t work. There are many details to consider regarding Income Loss coverage, so be sure to review this option carefully.

Recommended coverage: $1,000 per month / $5,000 in total coverage

Protect Your Financial Future

You may be downsizing or watching your budget more closely if you’re divorced or widowed, but don’t cut your auto insurance coverage. If anything, add more coverage as you review your policy. It’s better to be prepared now and not jeopardize your financial security later.

Attorney Edgar Snyder has served the residents of western Pennsylvania and its surrounding regions for over 40 years. His advice comes from representing thousands of auto accident victims and their families. For more information on auto insurance, view the free e-book on “How to Choose Auto Insurance”at http://www.edgarsnyder.com/pdf/auto.pdf. 

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