Protecting your family’s financial safety and security in the face of uncertainty and risk takes planning and effort. Unfortunately, we frequently meet with people who have suffered an injury or death that, in addition to everything else, has impacted their financial security. We specialize in helping people get financial recovery for their losses.
But we’ve learned there can be roadblocks to recovery. People who have done financial planning, specifically those who have thought about insurance needs, tend to fare better during and after the lawsuit. We want to share our experiences with you.
While we hope you’ll never need to call on disability, UIM, or excess insurance, it is a fact of life that some of you will need to. We suggest a call or meeting with an insurance broker or financial planner to make sure you are properly prepared. Here are some areas to discuss with them.
Car, bicycle and pedestrian accidents: Make sure you have enough uninsured/underinsured motorist coverage
In California, if you are involved in a car accident, you have a one in three chance that the driver will be uninsured or will have the statutory minimum policy of $15,000 per injury/$30,000 per occurrence. What does this mean to you? If you have a significant injury, the other driver may not have enough insurance to cover the incident. And drivers without enough insurance tend to be drivers without any personal assets to cover your loss.
Your best defense? Your uninsured/underinsured coverage, also known as UIM coverage. Most people don’t give this aspect of their car insurance policy any thought until we have to ask them about it following an accident. In most situations, your insurer will automatically set your UIM coverage at the same level as your policy limits. This means if you carry a $100,000/$300,000 policy, your UIM coverage will be $100,000. We recommend carrying a $300,000 UIM policy and making sure you have an umbrella policy that extends UIM coverage under the umbrella policy (we’ll discuss umbrella policies a little later on). Why $300,000? This is usually the minimum requirement for an excess policy. Check with your broker or excess policy carrier to find out what their minimum is.
There is another benefit to UIM coverage. Under most policies, it will cover you even if you are a pedestrian, in another car or on a bicycle and struck by a car.
There are a couple downsides to UIM coverage. First, UIM cases are resolved via settlement or binding arbitration, meaning you do not get a jury trial. Second, your maximum UIM settlement or arbitration award payment will be reduced by any proceeds you receive from the driver who caused the accident. For example, if the driver who struck you has a $15,000 policy and you have a $100,000 UIM, your maximum payment would be $85,000 from your UIM carrier after receiving the $15,000 from the driver. The downsides should not prevent you from making sure you have a strong UIM policy since the alternative—no coverage—is far worse.
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