We just processed another case where (again) we and the client learned that the insurance available (both the tortfeasor's and the client's) to compensate our client was awfully low - leaving the client very frustrated and depressed. This has led us to once again put together a post about the basics of automobile insurance.
Here are what we consider to be the basics: First, get the right amount of coverage. Regardless of your income or assets, having automobile insurance coverage limits LESS than $300,000 is just plain crazy. With the ever rising costs of medical bills (both ER bills and post-accident treatment bills), coverage in Ohio of only $25,000 (the new minimum required under Ohio law for now) might just barely cover the ER bills - leaving nothing for your pain and suffering or any further medical treatment. The writer of this blog is the married father of 4 kids - and he has $500,000 - with a million dollar "umbrella policy on top of that (umbrella policies are something we can explain in another post). In 2013, Ohio raised the minimum amount of coverage that all drivers must have to $25,000 (per person) and $50,000 (per accident). However, this is still not enough. You might be very surprised to know that increasing your insurance coverage does not mean that your premium will go up dramatically. From what we hear, MOST of your premium covers the first $25,000 of coverage, and increases in coverage does not raise the premium proportionally. You can also consider raising your deductible in order to get a reduction of your premium. Most insurance brokers rarely tell you this for obvious reasons.
Second, make sure you have what is called "uninsured" and "underinsured" coverage that is at least $300,000 as well. You would be surprised how many drivers still drive without good coverage - or without any insurance at all. "Uninsured" insurance covers you when the tortfeasor has NO insurance. "Underinsurance" takes over when the insurance of the tortfeasor is so low that you need your own insurance to make up the difference.
Look at your coverage now and talk to your insurance broker. Call us if you have any other questions. Don't end up like the poor client of ours that we had to help this past week.