Laws are forever changing. Recently, state legislature changed the laws regarding insurance companies. Unfortunately, limits and definitions will be rolled back to levels that are not good for the consumer.
It is more important, now than ever, to be educated when you’re buying insurance. Make sure you buy as much as you can afford.
When looking at liability coverage, make sure you have enough to cover your assets. In determining how much underinsured and uninsured motorist coverage you need, look at how much your monthly expenses are, how much insurance you would need in the event you’re out of work for six months. Take the time necessary to get the right amount of coverage.
There are a lot of definitions in your policy that are hard to understand. Have your insurance agent go over them with you. One example is a reducing clause. In the event you’re making a claim against your own company for underinsured motorist benefits, they get to reduce that by the amount you received from the other driver. That makes it critical for you to buy a lot of underinsured motorist insurance.
Also know that when they are defining underinsured motorist coverage, they’re not looking at how seriously you’re hurt, they’re first looking at your level of coverage versus the other driver’s level of coverage. So, if the person that hurt you had a hundred thousand dollars of insurance, and you have a hundred thousand dollars of underinsured motorist, even if you have a million dollar claim, you cannot make a claim against your own company because the other driver had the same amount of insurance as you.
The one lesson we need to know when buying insurance coverage is to buy as much as you can afford because once the accident happens, it’s too late.