Wednesday, March 14, 2012

What Type of Automobile Insurance Coverage Should I Carry?

            There are many different variables to consider when purchasing automobile insurance.  The minimum insurance limits in the State of Connecticut for motor vehicle liability coverage is $20,000 per person and $40,000 per occurrence.  Essentially, this means that if you are responsible for causing an accident, the most any one person can collect from the bodily injury portion of your insurance coverage is $20,000 and the most any number of claimants could recover from one accident is $40,000.   Of course, how much insurance to carry is a personal choice and will be governed by financial considerations as well as recommendations from your insurance agent or broker.
            In terms of the amount of coverage, one has to consider what type of protection is needed to cover personal assets.  Also, some individuals feel more secure having a larger policy, with for example, a $300,000 or higher limit.  Surprisingly, an extra $100 or $200 in annual premiums may correlate to $200,000 in additional liability coverage.  Furthermore, limits for underinsured and uninsured motorist coverage may be crucial if a claim ever needs to be made.  Generally speaking, most insurance agents will write the same amount of coverage for this portion of your policy that is written for liability limits.  Nevertheless, you may ask for higher limits of uninsured/underinsured motorist (UM/UIM) protection.  If you are injured in an accident that is the fault of an uninsured driver or one with low limits of coverage, it is important to have sufficient protection on your own policy. 
            Two other factors should be addressed when buying a policy.  First, one should consider conversion coverage.  This is an option that, in effect, “stacks” your policy onto that of a tortfeasor (another party who causes an accident) in which you or someone covered under your policy is injured.    In other words, if someone at fault has insurance coverage that is not inadequate to pay your fair just and reasonable damages for injuries which have been sustained, conversion coverage allows you to place your underinsured motorist coverage on top of the responsible party’s coverage regardless of what your limit of underinsured motorist coverage may be.  This is in contrast to the typical scenario whereby you would only be able to collect that amount of underinsured motorist coverage which is in excess of the tortfeasor’s policy.  Second, a decision should be made as to whether or not to purchase medical payments coverage.  Regardless of fault, medical payments coverage will pay for medical treatment necessarily incurred as a result of a motor vehicle accident.  This is generally an inexpensive add-on to your policy, but can be very useful if you do not otherwise have health insurance, or, alternatively, have high deductibles and co-pays for doctor’s visits.

Questions or comments?  Contact Attorney Bruce Newman at