What Coverage Should You Purchase?

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By Susan D’Alonzo Ament, Esquire

Most Delawareans know that they are legally required to purchase automobile insurance for their vehicles. However, beyond knowing that insurance is required, most people do not understand what they are purchasing or why. This article aims to explain the coverages you purchase – or should purchase – in your automobile insurance policy. If you are ever injured in a car accident, it is essential to understand your insurance policy.  

Medical bills and lost wages resulting from your injuries caused by an accident can be significant. When you are involved in a motor vehicle accident while in a Delaware insured car, your medical bills and wage loss are paid by the automobile insurance covering the car you are occupying – REGARDLESS OF WHICH DRIVER IS AT FAULT. This coverage – applicable to your medical bills and lost wages – is known as Personal Injury Protection (PIP) coverage. It is also commonly referred to as no-fault coverage.  

PIP coverage is required to be carried on every Delaware registered motor vehicle. Delaware law requires that, at a minimum, each car carry $15,000 per person/$30,000 per accident coverage. Higher limits are available. It is recommended you purchase the highest amount of PIP coverage you can afford. It is typically not very expensive, and can provide some peace of mind knowing there is sufficient coverage for your medical bills and lost wages. Remember, PIP coverage covers you and any occupants of your car if involved in an accident. It also generally applies to any relative residing in your household who is in an accident in a car that does not carry no-fault/PIP or carries insufficient coverage. This coverage is for YOUR benefit.  

Unfortunately, there are some Delawareans who make the choice to drive uninsured. One of the most commonly asked questions we receive is: “If I am hurt in a car accident that wasn’t my fault, and discover that the at-fault driver doesn’t have insurance, am I out of luck?” Not necessarily. If you have uninsured motorist (UM) coverage, you will have a claim.

Under Delaware law, uninsured motorist coverage applies in four situations: (1) the at-fault driver has no liability insurance; (2) the insurance company insuring the at-fault driver is insolvent; (3) the insurance company for the at-fault driver denies coverage; and (4) the accident was caused by a hit-and-run driver. In Delaware, an insurance company must properly offer uninsured/underinsured (UIM) motorist coverage in an amount equal to the amount of your liability coverage. If the insurance company has failed to make a proper offer of this UM/UIM coverage, it can potentially be increased even after the accident. An experienced Delaware personal injury attorney will be on the lookout for this issue.  

Underinsured (UIM) motorist coverage applies when the value of your injuries is greater than the at-fault person’s insurance coverage. Uninsured (UM) and Underinsured (UIM) motorist coverages are sold together. They can only be purchased as a “package” deal – even though they serve different purposes. Again, like PIP coverage, UM/UIM coverage is for YOUR benefit.

So far, all of the coverages described have been for your benefit – if you are injured in a car accident. But what about if you are the one deemed to be legally at fault for an accident and injure someone else? Your liability coverage is coverage that protects against claims resulting from injuries or property damage that you caused. If you are found to be legally responsible for an accident, your liability insurance coverage covers any payouts or settlements to the injured party up to the limits of your policy. The State of Delaware requires you to maintain $25,000 per person/$50,000 per accident liability coverage on every vehicle you drive. That coverage is the required minimum; it is wise and prudent to purchase additional insurance if you are financially able to do so.  

Finally, a cautionary word about deductibles. A deductible is the amount of money you will pay out of pocket on an insurance claim before an insurance company will pay any expenses on that claim. For example, if you have a $5,000 PIP deductible on your $15,000 PIP policy, you must pay $5,000 toward your own medical bills before the insurance company is obligated to pay for your medical bills or lost wages. Generally, deductibles are not a great idea. While they may lower the cost of your insurance, they potentially place you in a difficult spot if you do not have the amount of your deductible immediately in your bank account. 

The insurance process will be much easier if you know and understand your policy benefits and coverages before a collision. If you or a loved one suffers the unfortunate event of a motor vehicle collision or work-related collision, the Personal Injury Group Attorneys at Morris James LLP will guide you through the process of obtaining the maximum compensation for your injuries to which you are entitled under the law. With multiple locations throughout the State of Delaware, we are available to serve you.

susan_ament_morris_james_am11_sqSusan D’Alonzo Ament is a partner with Morris James LLP and has practiced for 33 years representing personal injury victims. Over the years, Mrs. Ament has found that some women don’t understand the crucial need to have adequate automobile insurance coverage in the event of a serious accident. Susan Ament educates women on these needs every day in her practice and in seminars that she presents throughout the year.

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