Managed Competition and Your Liability Coverage
Attorney
(866) 735-1102 Ext 540
With Managed Competition now here in Mass; and liability carrier commercials flooding the airwaves, I thought a little motor vehicle insurance primer was in order.
In this economy, I find that many injured clients have inadequate liability coverage to compensate them for their injuries. In Mass. your motor vehicle coverage is intended to protect your hard earned assets if you or a family member injures another person, and to compensate you if you are injured by a driver who has inadequate or minimal coverage.
Coverage designed to protect you and your family as a result of injuries caused to another is called "bodily injury (BI) to others", or "optional bodily injury to others". State law requires you to carry minimum coverage of $20,000/$40,000, but you should purchase additional coverage through the optional component of the policy of at least $100,000/$300,000 ($50,000/$100,000 and $250,000/$500,000 are also available). Also, you should obtain coverage for "bodily injury caused by an underinsured/uninsured auto (UM)" or optional coverage of the same name. A vehicle is underinsured if the value of your claim exceeds the amount of bodily injury coverage carried by the at-fault driver. For example, if there is $20,000 available per injured person, and your claim is worth $100,000, the at fault vehicle is underinsured by $80,000. This is where carrying adequate uninsured/underinsured coverage becomes crucial.
To be adequately protected in all events, everyone should carry BI coverage to others, as well as UM coverage for themselves of at least $100,000/$300,000. If you or a household member seriously injure another person and only possess minimum coverage, your personal assets could be attached to satisfy a judgment that exceeds policy limits. Conversely, if you are injured and possess minimum UM coverage, your recovery will be limited to the actual amount of coverage held, even if the value of the claim exceeds that coverage. In the above $100,ooo example, you would have been able to recover that $80,000 above the $20,000 from your own UM coverage. Without it, you would be limited to a recovery of $20,000 only.
The additional cost involved in purchasing this extra coverage is less than many people believe. Also, I routinely find that many people have never had a discussion with their insurance agents about these coverage issues. "My agent never told me" is a common refrain. Talk to your agent or attorney about these issues before you place your coverage. After the accident, it's too late!
Protect yourself and drive safely.
Bruce Bierhans