Understanding Policy Limits

You are hurt in a car accident.  You have car repairs, medical expenses, you cannot work...your car insurance should pay, right?  Yes they should BUT what they pay is based on you.  It's called policy limits and you decide what they will be when you get car insurance.





For example:  In Colorado all driver are required to carry $25,000/$50,000 but what does this mean?

The first number is easy:  This is the number that is allowed per person in a car accident.  The second number is the tricky part...this number is the TOTAL amount that is paid per occurrence.  What this means is if there are four people hurt in a car accident the $50,000 is divided between the four; $12,500 per person.  This number is regardless of how many people are hurt.  Imagine a five car pileup.....12 people are injured....this is not a lot of money to go around.

Now comes the uninsured/underinsured  (UM/UIM) coverage.  In Colorado you can waive this in writing but for the few extra dollars it is well worth the money.  My personal example; I was hit by a person who carried only the required amount 25/50.  $25,000 didn't even come close to what I needed for my injuries.  This is where my UIM (underinsured motorist kicked in and my insurance company paid the difference.  

I will admit until I needed it, I didn't understand it....by then, it's too late.  After my car accident and the information provided to me by my Attorney, Carol Zeisler, I changed my policy.  When I went in to discuss this with my agent I was surprised at the little difference it made in my premium amounts.  

No one wants to be in a car accident.  Most of us take care when driving so we aren't involved in a car accident....but they happen no matter how much care you take when driving.  One trip to the grocery store, to work or going home.....five seconds later your life can change.  

Ask yourself this:  would $25,000 pay for a lifetime injury in your life?  Know your policy, know what it means to you and if you are ever in a car accident....hire an Attorney. 

Next conversation will be about MedPay.  Hope you stay tuned.


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