Do you know your limits?
We aren't talking about your speed or ability. How much do you know about your liability coverage?
Every car owner in Washington State is required to have liability coverage. It's what pays for accidents when you are deemed at fault. Though let's be honest, the first number you look for on your coverage is how much your paying, not how much it pays for. Do you know how much your paying for?
Let's say you're curious. You want to find your coverage. Since most companies encourage clients to go paperless, your insurance info is probably attached to an email or in your account you log into on the insurer's website. Most insurers make it pretty easy to find. Just look for "Coverage" and you're golden. If you're having trouble, try looking for the "Declarations" page. Essentially a declarations page is just information about your insurance.
So now you have a document on your screen with a table of words and numbers. We want to focus on the top few lines. You might see something like this:
Or perhaps it's broken down a little like this:
Bodily Injury 50/100
Property damage 200
Let's break this down. The first two numbers are related. Using the above example they are $50,000 for bodily injury (medical) coverage per person and $100,000 in total for bodily injury. And the last number is $200,000 of coverage for property damage. Remember, this is coverage if you are the at fault party in a car accident. This money goes to the people in car you hit. The property damage coverage is straight forward, but the bodily injury coverage can be confusing. Here's an illustration to help explain:
Imagine your liability coverage being a pool of water. One pool for bodily injury and another for property damage. Your insurer fills your bodily injury pool with $100,000 of water. Whenever someone makes a bodily injury claim against you your insurer will give them a truck with a tank on the back that can hold up to $50,000 worth of water. Then they will drive up to your pool and pull up enough water to fill their claim. If their claim has $20,000 of medical bills, they'll pull up $20,000 out of your bodily injury pool and drive off satisfied and leaving you with no worries.
Let's get a little complicated. What if the other driver's claim is $60,000? Well, since your insurance only provides trucks with $50,000 capacity the other driver will pull up to your pool and fill the truck to max, which is $50,000. But they still have $10,000 to go. What now? There's still $50,000 left in your pool. Surely they can pull out more, right?
It's a per person limit of $50,000. If the claim is $60,000 your insurance will pay off the $60,000 and then send you a bill for $10,000. Doesn't matter if your pool's capacity is $100,000. And no, you can't pull from your property damage pool.
Let's step it up a notch. Now let's say you rear end a car and there's 3 people hurt in said vehicle. Those 3 people will each make a bodily injury claim with your insurance. If all 3 claims are $30,000, are you covered with 50/100 bodily injury limits? The answer is...yes! Each claim is under your $50,000 per person limit and all 3 together are under your $100,000 in total limit for injury coverage. What if the 3 people injured above have injury claims of $40,000 each? How much are you on the hook for? That's right, $20,000. Your insurer will pay the $120,000 of claims then send you a bill for $20,000 since your total limit was $100,000.
Now someone would need to have serious injuries to have almost $50,000 worth of medical bills. But it does happen. And more often then you think. Whiplash injuries alone can have claims ranging from $2,500 to $30,000. Hopefully now you have a fuller understanding of what your coverage actually covers. If you don't, don't worry! Whether we are your agent or not, we at Best Insurance Services are happy to answer any questions or run a quote for you for free! Email us at firstname.lastname@example.org