How much insurance coverage should you have on your motor vehicles, not only to protect your family, but also to protect yourself against bodily injury?
Pennsylvania law requires a minimum of $15,000.00 bodily injury coverage for each of your household vehicles. Bodily injury insurance is coverage that is available in the event you are negligent in driving your automobile and, as a result of your negligence, you injure either a pedestrian or a driver or passenger in another vehicle.
Let me give you an example. You are driving in your hometown and you inadvertently enter the intersection when the traffic signal is red for your vehicle and you broadside another vehicle that was traveling through the intersection, having had the green light for his vehicle. The driver of the other car is taken to the local hospital with a broken neck. The injured party remains in the hospital for several days and his medical bills total close to $100,000.00. The injured party is incapacitated and unable to work for three months as a result of his injuries. He hires a personal injury lawyer, and a few weeks after the accident, you receive a letter of representation from the attorney requesting that you turn the letter of representation over to your insurance carrier. You follow the attorney’s instructions and turn the letter of representation over to your insurance agent, who then turns it over to the home office.
Assuming, you chose the minimum bodily injury coverage of $15,000.00 or even $30,000.00, that may not be enough to pay for the pain and suffering and the loss of income that the injured party sustained. What you will receive from your own carrier is a letter stating that your insurance coverage for bodily injury may not be sufficient to cover the damages that the injured party may have sustained; therefore, it will be necessary (for your own self-protection) to retain your own lawyer.
You might say to yourself that you have $15,000.00 in coverage, and that should be sufficient. Realistically, under the above scenario, the damages that may be awarded to the injured party could very well surpass $100,000.00. If you only have $15,000.00 insurance coverage, you could be responsible for the remaining $85,000.00 in damages. You would have been woefully underinsured and could very well have personal liability. If a judgment was awarded to the injured party in the amount of $85,000.00 and against you personally, your personal property might be sold to satisfy the unpaid damages. If you own real estate in your individual name, that real estate could be liened in the amount of $85,000.00, and in the event you did not pay the damage award, your property could be sold to satisfy the $85,000.00 judgment. You would also have the cost of hiring your own lawyer, which in the hypothetical above, could cost you well over $10,000.00.
Your insurance agent should be able to assist you by making recommendations of the appropriate amount of bodily injury insurance to protect you and your property. If you own real estate, whether individually or jointly with your spouse or other family members, my professional opinion is that you should carry no less than $100,000/$300,000 bodily injury insurance. What that means is, there is $300,000 available for one accident, and $100,000 available for up to three injured individuals.
I will continue this article on motor vehicle insurance in our next blog post, so stay tuned.
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— Written by Richard D. Linderman, Esq.
DISCLAIMER: The contents of this blog are not legal advice, and are not to be used for that purpose. If you are faced with a legal matter, you should contact a lawyer immediately in order to ensure that you are protected.