What Kinds of Car Insurance Should I Buy?
Everyone is required by law to have liability insurance on their motor vehicles. If you drive without liability insurance, you can receive a citation and be forced to pay a large fine. Liability insurance protects people who you injure, and it protects you if you are at fault in causing an accident. If you are involved in an accident and you don't have liability insurance, you may lose your driver's license, be sued for a great deal of money, and even be driven into bankruptcy. Liability insurance comes in different amounts. The minimum legal amount in Washington is $25,000/$50,000/$10,000. This means that the insurance will pay up to $25,000 to someone you injure, up to $50,000 if you injure more than one person, and up to $10,000 if you damage someone's property.
There are other types of motor vehicle insurance that, while legally optional, are very important to have and very foolish to drive without.
"Personal Injury Protection" or "PIP". PIP will cover all of the medical bills for you and for everyone in your car if there is an accident, regardless of whose fault the accident is, up to a maximum of (depending on the policy) $10,000 or more. PIP also will pay some lost wages if you or someone in your car misses time from work because of injuries from a car accident. Even those with good health or disability insurance should buy PIP. It is not expensive, it has no "deductibles" or "co-pays", and you can go to any licensed health care provider in Washington, including chiropractors and others who are excluded from or limited in some health insurance policies.
"Uninsured/Underinsured Motorist" or "UIM". Unfortunately everyone doesn't carry liability insurance. It's illegal but it happens. Furthermore, in a serious accident, even those who do have insurance may not have enough. UIM insurance protects you if you are hit by a driver with no insurance or too little insurance. If you don't have it, you are at the mercy of irresponsible people, which is not a situation you want to find yourself in. UIM is so important that you have to buy it unless you sign something saying you don't want it. Giving up UIM will lower your insurance premium a little bit, but we believe it would be penny-wise, pound foolish because if you don't have UIM, one accident with an uninsured drunk could ruin your life.
Collision/comprehensive coverage: These types of insurance insure your car, not people. If you have a new or expensive car they make sense to buy. If you have an older car or a "beater", you could pay more in collision insurance than the car is worth! If you have financed your car, the bank will require you to have collision and comprehensive insurance, to protect them in the event the car is wrecked. But if you own your car free and clear, whether you buy collision/comprehensive insurance is a personal financial decision. One money-saving option to consider is to buy the coverage but carry a large deductible. That way you will pay for small damages to your car, but if the car is totaled you will still have some protection. In the long run, this option probably will save you money, unless you are unlucky enough to be in an accident soon after you buy it!
The interrelationships between liability insurance, PIP and UIM can be complicated in some cases. Our attorneys can help you to deal with all of the insurance and financial questions that arise after a serious accident. Please call us for a free consultation.