A few years ago a client of mine was in a very severe accident after another vehicle crossed the center of the road and struck her head-on. She suffered several fractures to her right leg which required surgery, a lengthy hospitalization, and a long rehabilitation. The at-fault driver only had $25,000.00 of insurance coverage from Allstate. Allstate paid the policy limits and we then went after my client’s underinsured motorist coverage from Farmers Insurance. My client had a 100/300 policy with Farmers ($100,000.00 per person and $300,000.00 per accident). Under my client’s underinsured motorist coverage, we could only collect an additional $75,000.00 even though my client’s medical bills alone far exceeded $100,000.00. After paying the medical liens, attorney’s fees, and case expenses, we were able to recover some money for our client, but she was not fully compensated for all of her pain and suffering, and the permanent disability she suffered as a result of her injuries. We could have gone after the at-fault driver, but he was a teenager with no assets. Unfortunately, this happens all too often to people who are injured as a result of a reckless driver.
Too many individuals purchase inadequate insurance coverage for their vehicles. In Illinois, as of January 1, 2015, the mandatory minimum limits for auto insurance coverage increased from 20/40/15 to 25/50/20. This means that every driver in the state must now have minimum liability coverage of $25,000.00 per person, $50,000.00 per accident, and $20,000.00 for property damage; however, the new mandatory minimum limits are entirely inadequate to protect you in case of an accident.
$25,000.00 of liability coverage per person will not cover a serious injury. If you are found liable for a collision and a large judgment is entered against you, your assets could be placed at risk and your wages could be garnished. For liability coverage, the attorneys at Friedman & Bonebrake, P.C. recommend that you purchase coverage of, at a minimum, 250/500 ($250,000.00 per person and $500,000.00 per accident). You may want to even consider higher coverage amounts if you can afford the premium payments and especially if you have significant assets. Many insurance brokers will try to only sell you 100/300 policies or less. This may have been adequate coverage 30 years ago, but with inflation and the rising cost of healthcare, this level of coverage is completely inadequate.
The mandatory minimum limits do not include medical payment coverage and collision coverage for your vehicle. Medical payment coverage will pay your medical bills up to the amount of the coverage you purchase and it will pay the medical bills of anyone in your vehicle at the time of the crash, even if you are determined to be at fault. The amount of medical payment coverage can range from $1,000.00 to hundreds of thousands of dollars. If you have good health insurance coverage, it is probably not necessary to purchase more than $5,000.00 in medical payment coverage.
It is critical that you purchase collision coverage to repair your vehicle in case of an accident. Collision coverage will be required if you lease or finance your vehicle. Your insurance company’s collision coverage will pay for damage to your car even if you are at fault. If it costs more to repair your vehicle than the fair market value of your vehicle, your insurance carrier will only pay you the fair market value. The exception is if you also purchased new car replacement coverage for your vehicle or similar types of coverage. If you want more than fair market value for your vehicle after a collision, you need to shop around and find the right coverage for you. You also need to consider the deductible you want for your collision coverage. This can range anywhere from $250.00 to $1,000.00 with most insurance carriers. The higher the deductible, the lower your premium will be.
Illinois requires uninsured and underinsured motorist coverage (UM/UIM) be included with every auto insurance policy. This is as important, if not more important, than your liability coverage. Insurance companies must sell you UM/UIM coverage in the same amounts as your liability coverage, unless you purchase higher coverage or you waive UM/UIM coverage in writing; however, you must have a minimum of 25/50 in UM/UIM coverage. UM/UIM coverage protects you and your family if you are struck by an uninsured motorist or a vehicle that has inadequate coverage.
For example, if you purchased a 100/300 liability insurance policy, and the other driver is determined to be at fault, but is uninsured, you and the other people riding in your vehicle can each receive a maximum of $100,000.00 (but no more than $300,000.00 in total for everyone combined) under your insurance company’s uninsured motorist coverage. Now, assuming the same set of facts except that the at-fault driver has a 25/50 policy, each person in your vehicle can receive a maximum of $25,000.00 from the at-fault driver’s carrier, plus an additional $75,000.00 under your insurance carrier’s underinsured motorist’s policy. Again, it’s important to note that under this example, all of the people in your vehicle can only receive a total of $100,000.00 per person and $300,000.00 combined. Of course, how much you are awarded in a UM/UIM case, as with all injury cases, is dependent upon the seriousness of your injuries and the amount of your economic damages.
UM/UIM coverage will also protect you and the members of your household if you are struck by a car when you are a pedestrian. For example, if you are a pedestrian crossing the street and an uninsured vehicle runs a red light and hits you, you can make an uninsured motorist claim with your own insurance carrier.
In order to purchase decent insurance coverage with adequate limits, you must purchase coverage from a reputable insurance carrier. All insurance companies can be difficult when it comes to paying claims, but you must avoid buying coverage from substandard carriers. The substandard insurance carriers in Illinois to avoid include, but are not limited to, The General, Safeway, American Freedom, Unique, Safe Auto, United Auto, Accurate, Eagle, Insure One, insurance sold by Lincoln Insurance, and many others.
Your purchase of insurance coverage can be one of the most important decisions you will make. Make certain that you are adequately covered by a reputable insurance carrier and review your policy once a year to make sure it provides adequate coverage.
Also, if you have the misfortune of being injured in an automobile accident, it is important that you first consult with an attorney before talking to any insurance adjusters. The attorneys at Friedman & Bonebrake, P.C. have over 20 years of experience representing individuals who have been injured as a result of reckless drivers on our roads. They can help guide you through the entire process and make certain that you recover every penny that you are entitled to under the law.