Are You Covered?
Every six months—for some policies once every year—you get a thick package from your auto insurance carrier in the mailbox. It has sheet after sheet of insurance language including endorsements, exclusions, et cetera. Sometimes the carrier includes a physical copy of their form auto policy. But there is one very important sheet, usually buried within the other pages, that everyone should read: the declarations page (DEC sheet for short). The DEC Sheet lists the types of coverages that your policy carries. Here is what each type of coverage is and what it does:
Liability Coverage - This type of coverage is the MOST important of your coverages. This coverage is usually broken down into:
Bodily Injury Limit(s)
Property Damage Limit(s)
Liability Coverage is the type of coverage provided to you, or anyone who uses your vehicle with your permission, for any crash/accident/collision caused by their negligent operation of your vehicle. Liability coverage also provides coverage for DUI/DWI, gross negligence, and willful and wanton conduct, but not for intentional torts related to driving the vehicle. You or your resident family member’s negligent driving may also be covered under the liability coverage if you are driving someone else’s vehicle (excess liability).
Bodily Injury Limits - This is the maximum dollar amount that the carrier may pay for injuries to someone else caused by you or a permissive driver of your vehicle while driving the insured vehicle(s). Bodily injury limits are usually split for a maximum dollar amount per claimant (injured person) and a maximum dollar amount for all persons injured in a crash/collision/accident involving the insured vehicle. For example: $100,000/$300,000 (100/300) Bodily Injury Limits means that your insurance company will pay a maximum of $100,000 for any one injury claim with a cap of $300,000 for all injury claims from a covered crash/collision/accident. Sometimes a policy DEC sheet will show combined single limits for bodily injury meaning that the maximum amount of coverage for any one injured person or all injured persons is the same (example $300,000 CSL).
Property Damage Limit - This number is the maximum dollar amount that the insurance company may pay for all damage caused to any property by an insured driver or permissive driver of the insured vehicle, including damage to other cars, damage to poles, fences, fixtures, landscaping, crops, and all other property damaged by an insured driver or permissive driver of the insured vehicle. This limit is usually a single dollar amount (example $50,000).
Uninsured Motorist Coverage (UM) / Underinsured Motorist (UIM) Coverage - These dollar amounts are the maximum amount of dollars that the insurance company is liable to pay YOU and anyone riding inside your vehicle for any damages (personal injuries) caused by another driver who either (1) does not have any valid auto liability insurance; or (2) has the state required minimum limits or more coverage than the minimum required, but not enough. By default, UM/UIM coverage matches liability coverage in both Virginia and North Carolina. However, when you buy or renew your policy, you can elect to lower your UM/UIM limits to an amount less than your bodily injury coverage. There are some important differences between the two states. For example: even a minimum limits 30/60 Virginia policy may provide coverage when there is insufficient liability coverage where a 30/60 North Carolina policy would not.
Medical Expense Benefits Coverage (Medpay) - This amount is the maximum amount of dollars that an insurance company is obligated to pay for medical expenses incurred as a result of a covered crash/collision/accident. In North Carolina, this is the maximum amount of dollars that the insurance company will pay regardless of the number of vehicle on a policy. In Virginia, the medical expense benefits number is multiplied by the number of vehicles on the policy at the time of the crash/collision/accident.
Income Loss Benefit Coverage - A relatively new offering, this coverage represents the maximum dollar amount that an insurance company is obligated to pay for lost income as a result of injuries from a crash/collision/accident.
There are other types of coverage such as comprehensive and collision coverage, but these apply to property damage, not injuries and so will not be addressed in this article.
It is very important to have the right amount of coverage on your auto policy/policies. If you don’t have the right/enough coverage, when you or a loved one is injured or if you or another permissive driver causes a crash/collision/accident, you could suffer significant losses. It is important to think about what coverages you need and to wisely purchase enough coverage for the unexpected.
Don’t wait until you are injured in a crash: review your auto policy today!
And if you've been involved in an automobile accident, have sustained injuries, and need our legal help, call Slaughter and Lupton Law today!