Unfortunately, most vehicle owners buy auto-insurance without knowing the material terms contained in their policy. I hear it every day. They know it is required by the State, and they purchase it-usually under time constraints-without consideration of the numerous options at their disposal to customize said coverage. Given the thousands of dollars that individuals and families spend, that is rather surprising. Given the potential exposure you may face, or money you may lose out on during a difficult time, that is rather incredible. If you are unable to recite your coverage and understand what it means without looking, then this is your wake-up call.
You will find your coverage on the “declarations” page of your policy. Connecticut requires a minimum of $25,000.00 per person and $50,000.00 per accident for bodily injury liability. Sometimes, this is reflected as “$25,000/$50,000” on the declarations pages. These are referred to as “split limits”. With those limits, if you injure someone your insurer will pay up to $25k for that person’s “bodily injury.” If you injure two people, your insurer will pay up to $25k per person, but no more than $50k in total for that accident. Anything beyond that you may be responsible out-of-pocket.
You may also purchase what is called “single limit” coverage, for example in the amount of $300,000.00. In this scenario, only $300,000.00 is available for any and all bodily injuries claimed in a particular accident that you cause.
I often recommend that my clients purchase a minimum of $300k per person in bodily injury coverage to protect themselves from any out of pocket exposure. But, no one can predict the future and at the end of the day it’s an odds game. Other factors are important as well: age of the driver on the policy; aggressiveness of driver on the policy; personal assets; miles driven; etc…. You can purchase any number of different dollar amount coverages, as long as it meets the State minimums. Thus, if you are worried about a particular operator, then you should purchase more in coverage.
Underinsured/Uninsured coverage means exactly what it sounds like. If an individual hits you and that individual only has, for example, the minimum coverage of $25k/$50k, but your damages amount to more than $25k, then the individual that hit you is “underinsured”. If they did not have any insurance at the time of the accident, then they are “uninsured”. At that point in time, your “underinsured/uninsured” coverage kicks in and attempts to make you whole, as if your own policy was possessed by the individual that hit you.
Typically, this underinsured/uninsured coverage matches your underlying coverage (e.g. $25k/$50k underlying coverage, and $25k/$50k underinsured uninsured coverage). Though, you can customize your underinsured/uninsured coverage as well. Underinsured/uninsured coverage is mandatory in Connecticut and is automatic with your general underlying coverage purchase.
Now, because the goal is to protect you up to the point you were willing to protect yourself, you generally cannot add your underinsured coverage to the payment made by the policy of the individual that hit you. Rather, your own insurer/policy gets a credit for payment made on behalf of the policy holder that hit you. By way of example, assume you sustained $125k in bodily injuries in an accident, and only hold $100k in underinsured coverage. If the individual that hit you had only $25k in coverage, they pay their $25k and are considered underinsured. Here, your policy does not simply pay the full $100k in underinsured coverage, but only pays $75k; again, because the $25k and the $75k puts you in the same position as if the person that hit you held what you held in coverage. That is called “non-conversion” underinsured coverage. Put differently, your policy gets a credit for what was paid out of the policy that hit you.
However, if you decide to purchase what is called “conversion” coverage, then your policy does not get the benefit of the monies paid out on the policy that hit you. In this scenario, you would get $25k from the person that hit you, and your full $100k underinsured coverage. You are entitled to that because you purchased that conversion option on your policy. As you can see, this has the potential to make a significant difference should you be found in such a precarious situation. Unfortunately, some of my clients have not been made whole due to limited coverage on the liable policy, and due to not having conversion coverage (or insufficient underinsured coverage) on their own policy.
This is only the tip of the iceberg, but it is the bare minimum of what you should be aware of when it comes to your policy and options you can purchase. Medical payment coverage and umbrella coverage were not covered in this article, but are additional options you can purchase to protect yourself.
If you are injured in a motor vehicle accident and are worried that the individual that hit you does not have enough coverage to compensate your for your injuries, pain and suffering, do not hesitate to call Attorney Sobin for a complete review.