Since I graduated from law school I have represented thousands of people that have been injured in automobile accidents.  When I am hired to help these people, one of the first things I ask my new clients about is their insurance policy.  Usually, the new client is surprised and they inquire why their insurance is even involved.  As I explain the claim process and the Utah tort system they understand but they usually become concerned because now they wonder how good their own coverage is.  At that time, I usually climb up on my soap box and give a little lesson about automobile insurance.  By the time I am done, most of my clients go out buy more insurance coverage.  (Sometimes I wonder if I should be selling insurance for a living.)

However, once an accident occurs you are stuck with whatever coverage you and the other person had on the day of the accident.  You can change your coverage for the future but it will not apply retroactive.  Therefore, you should understand your insurance policy and know your coverage before an accident occurs.  To help others understand what insurance coverages they need, I have prepared the following information.

What kinds of auto insurance are there and what do they cover?

It’s often easier to think of your auto insurance policy as seven separate policies. Some types of coverage are required by state law, depending on where you live. Other coverage is optional but a good idea.  I always tell my clients that they should consider each one and ask themselves how much of each they need.

1.      Bodily injury liability (BI) coverage is insurance that covers the other people in case you cause an accident in which someone is hurt or killed. Utah law mandates carrying no less than $25,000 per person and $65,000.00 per occurrence.  Many insurers recommend carrying at least $100,000 per person and $300,000 per occurrence.  I agree that the higher limits are more reasonable.  You should consider what assets you have to protect and your pocketbook can bear when deciding how much to purchase.  This coverage is responsible for most of your insurance premium.

3.      Collision coverage covers damage you cause to your car from a collision with another car, a brick wall, a fire hydrant, etc.   You should have enough coverage to pay for your car (or loan) in full in case it was totaled.

5.      Uninsured motorist coverage pays you and other passengers in your vehicle when you are injured as the result of an accident where the at-fault driver is uninsured you are involved in a or a hit-and-run.  It is available to you in two forms - property damage coverage (UMPD)(if you don’t have comprehensive or collision make sure that you have enough coverage to pay for your car (or loan) in full in case it was totaled) and bodily injury (UMBI) coverage to pay your bills and other damages when you are hit by a driver without insurance.  Utah law mandates carrying no less than $25,000 per person and $50,000.00 per occurrence, however, I suggest no less than $100,000 per person and $300,000 per occurrence.  If you can afford it, I recommend purchasing more, most companies offer limits up to $250,000 per person and $500,000 per occurrence.  If you want more than that you usually will have to purchase extra coverage known as Umbrella Coverage.

 7.  Personal Injury Protection and No Fault coverage, PIP, also called MedPay for motorcycles, pays for medical expenses you and your passengers incur because of injury in a motor vehicle accident, regardless of fault. Coverage amounts available vary from company to company.  Utah law mandates carrying no less than $3,000.00 per person, I suggest $10,000 per person unless you have no health insurance in which case I recommend $100,000 per person.  This coverage also pays lost wages (85% of your loss up to a maximum of $250.00 per week) and loss of household services (up to $20.00 per day up to $140.00 per week).