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Auto Insurance: A Buying Guide

Posted July 12, 2017

By Jonathan A. Karon

As a personal injury attorney who represents many people injured in auto crashes, I have some strong opinions and advice regarding auto insurance coverage. Based on my experience, I have three important recommendations.

First, purchase underinsurance coverage.

This so important that I wrote a prior blog post just on this subject.
Underinsurance protects you if the driver who injured you doesn’t have enough coverage to pay for the full extent of the damages they caused. In Massachusetts, drivers are only required to have $20,000 in liability coverage for any one injured person. With even a moderately severe injury, your medical bills and lost earnings alone will probably be more than that, without including any compensation for what you’ve been through (i.e. your “pain and suffering”). Fortunately, you can purchase an extra layer of coverage on your own policy that will provide additional coverage in this situation (or it you’re injured by someone with no insurance). I always recommend that my clients purchase at least $100,000/$300,000 in underinsurance coverage. This ensures that there is potentially at least $100,000 in coverage to compensate you or anyone else in your car, up to a total of $300,000 in coverage for all the injured people in your car. A more detailed description of how this works can be found in my blog post “What is Underinsurance Coverage and Why do you Need it?” The bottom line is it’s inexpensive coverage and can be important. Now your insurer won’t sell it to you unless you also raise your bodily injury liability limits to the same amount (in other words they won’t let you protect yourself more than other people) but this is also relatively inexpensive and a good idea, particularly if you have any assets.

Second, don’t purchase a PIP deductible.

PIP, also known as personal injury protection benefits, is no fault coverage which can pay up to $8000. It pays the first $2000 in crash related medical bills if you have private health insurance or the first $8000 in medical bills if you don’t, whether or not the crash was someone else’s fault. It can also potentially pay a portion of your out of pocket lost wages and for deductibles and co-pays. Some insurers have advised customers with health insurance to get an $8000 PIP deductible claiming that their medical bills will then be paid by their health insurance. The problem with this is it’s generally not true. Most health insurers will require you to use any available PIP benefits to pay accident related bills before they will pay. If you have a PIP deductible, they may not pay these bills at all or at best, payment will be significantly delayed while coordination of benefits issues get worked out. So, my advice, never buy a PIP deductible.

Third, don’t purchase Medical Payments coverage.

Because of a string of court decisions, the circumstances under which you can access any benefits under this coverage are very rare. If you do qualify for benefits, it’s generally to pay bills that would otherwise be covered by your health insurance Most health insurance policies will require you to use any available medical payments coverage to pay bills before they will pay. So, if you don’t buy the coverage, usually your health insurer will pay these bills. If you do buy the coverage, you’re essentially paying premiums to benefit your health insurer. As I said, there are some rare circumstances where, if you have a successful personal injury recovery, you may benefit from this coverage, but generally, it’s not worth it.

As far as collision coverage goes, I don’t usually handle those for clients, so I would leave it to you whether it is worth insuring your car (assuming you don’t have an auto loan and have to carry collision). If you do get collision coverage, I highly recommend getting a waiver of deductible which means that your insurance company foregoes your deductible if the damage to your car was another driver’s fault.

If you would like more information on how auto insurance works in personal injury cases you might also want to check out my prior blog post “Auto Insurance for Personal Injuries-a Brief Guide”

Also, there is a difference between companies in how they treat their policyholders. In my view this is a more important consideration than price. So, the next time you need to renew your coverage, you might talk to some friends about their experiences with their auto insurers. You could also talk to a few personal injury lawyers. We all have a few stories to tell.

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