by Jay Mascolo, RAM Law
Dec. 15, 2016
We have all seen the auto insurance commercials on TV: Cavemen, lizards, Flo, ziplining pigs, bum ba dum dum dum. You’ll agree they are entertaining and humorous. Some of those catchy little jingles even stick in our heads for days. However, underneath the clever ads lies a risky situation affecting the families of New Jersey drivers who are not properly informed when it comes to purchasing auto insurance. Forget the “15 minutes or less can save you” commercial for a second. Reading this article for 15 minutes or less can save you and your family from a financial or medical nightmare.
Many of the commercials from automobile insurance companies are designed to attract potential customers to their websites, where purchasing automobile insurance is easy and inexpensive. Any moderately computer-literate person can go to a website and buy a policy in a matter of minutes. Learning the details of what they are actually purchasing probably gets short attention.
Take out your automobile insurance policy “declaration page,” the one-or-two-page document that explains your coverage limits. It may look confusing at first, but focus on the three most important things: (1) PIP (personal injury protection); (2) liability; and (3) UM/UIM (uninsured/underinsured motorist coverage). In most cases, the New Jersey minimum coverage for each of these is $15,000. Insurance company commercials direct you to websites where it’s easy to purchase less expensive policies with these $15,000 limits. But having coverage of only $15,000 on any of these three items puts you and your family at significant risk.
First, a quick primer on those three important terms.
To understand how UM/UIM coverage works, imagine a perfectly healthy person driving to work who stops at a light and is rear-ended by someone not paying attention. The person is taken by ambulance to a hospital. They have injuries to their neck, back, shoulder, or knee that don’t respond to conservative medical treatment and require surgery. The pain stays with them and results in a permanent injury. They lose time from work due to the injuries and treatment. They retain an attorney to pursue their legal right to recover damages. If the person who caused this accident is covered by a policy with a liability limit of $15,000, then recovery for all injuries may be limited to only $15,000. This is where UIM coverage becomes important. Regardless of the other person’s policy limits, you have a right to recover up to your UIM policy limit in this scenario. For this reason, I strongly encourage at least $100,000 in UM/UIM coverage, and if you can, increase this coverage up to $250,000.
While your premiums will go up when you increase your UM/UIM limits, you may be surprised at how affordable it can be. If you have to pay $50 more per year to increase your UM/UIM limit above $15,000, I strongly recommend you make that investment to protect you and your family.
There are other parts of your insurance policy that are important such as property damage coverage and tort threshold. But the three mentioned above are those where the wrong policy coverage can be financially devastating for you and your family. Do not fall victim to the fancy commercials and jingles that you can’t get out of your head. Insurance companies want you to buy those $15,000-limit policies because their exposure on making payouts is limited. By shopping around and digging just a little deeper into your pocket (sometimes only $10-$20 more per month), you can easily increase your policy limits and protect yourself and your family.
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