Are You Underinsured? Here’s How To Find Out

Oct 20, 2021 | Car Accidents, Uninsured Drivers

For most of us, insurance is a product we purchase grudgingly, hoping we will never have to use it. No one likes to pay for something they don’t need, so we often buy as little coverage as possible — for example, insuring a house for far less than its actual replacement value, figuring that a total loss by fire or flood is too remote a possibility to worry about. It’s just easier to pay for the bare minimum of coverage, out of fear of paying too much.

But what about car insurance? The likelihood of getting in a car wreck is far greater than that of your house burning down. Surveys by insurance companies indicate that three out of four drivers on the road have been in an at least one accident in their driving careers. In fact, on average drivers will experience at least one crash by the time they are 34 — and three or four accidents over their lifetime.

A serious car wreck can be a life-altering event, costing tens or even hundreds of thousands of dollars in medical bills alone. Yet many drivers lack adequate coverage to protect themselves, their passengers and others in such a catastrophic situation. Here are some steps you can take to make sure you’re not one of them.

PERFORM A COVERAGE CHECK-UP

It’s a good idea at least once a year to review your auto policy with your insurance agent, to determine if the coverage is sufficient to address your current circumstances. Some drivers may be convinced that they can “get by” with the minimum liability coverage required by law, which in Colorado amounts to $25,000 per person for bodily injury, with a maximum of $50,000 per incident, and another $15,000 in coverage for property damage. But while that minimum will probably cover the expenses of a minor accident, it’s clearly inadequate for more serious situations, in which medical costs (or the replacement value of a high-end vehicle) could exceed the policy limits.  For not much more than the minimum premium, you can get four times as much coverage: $100,000 per person for bodily injury, $300,000 limit per accident, and $100,000 for property damage, known as the 100/300/100 option. Those with substantial assets to protect should consider increasing the coverage to the maximum amount allowed by their carrier; in most cases, that’s $250,000 per person and $500,000 per accident.

PROTECT YOURSELF FROM OTHER UNDERINSURED DRIVERS

Upping your liability coverage can protect you in accidents for which you might be held liable. But what happens when the other driver is at fault — and has little or no insurance? You can pursue the culpable party in court, but unless that person has substantial assets, you may end up no better off. It is far easier in that situation to file a claim with your own insurance company, under your uninsured/underinsured motorist coverage.

Uninsured/underinsured motorist coverage covers your losses from being hit by a driver who does not have insurance, or if the at-fault driver is underinsured. Depending on the specifics of the coverage, it can help pay for medical bills, lost wages, and other losses caused by the accident. In Colorado, insurance companies are required to offer uninsured motorist bodily injury coverage (UMBI) as part of any standard policy; if you don’t want it, you must formally waive that coverage in writing. But you not only shouldn’t waive it, you should consider increasing the coverage well beyond the minimum. (Your UMBI limits can’t exceed those of your liability coverage but should match it.) This is one point that personal injury attorneys and insurance agents agree on; UMBI coverage is a must.

WHAT THE NUMBERS SAY

Why pay to protect yourself from other underinsured drivers? Consider the odds. Nationally, it’s estimated that 13 percent of all drivers, about one out of every eight, is driving without insurance. Your chances of being in a collision with one of America’s 32 million uninsured drivers are even greater in Colorado, which has a substantially higher rate of uninsured drivers than the national average – closer to 20 percent, by some estimates.  And of the 80 percent of the driving public who do have insurance, nearly half of them are carrying only the bare minimum liability coverage. In other words, if you happen to be seriously injured in an accident that wasn’t your fault, the likelihood that the other driver carries no insurance or is underinsured is better than 50-50.

Those may be good odds for a football game or a horse race. When your health and welfare and that of your loved ones are involved, though, the risk is just too great not to be addressed.

THE CAR ACCIDENT LAWYERS AT FDAZAR

For more than thirty years the attorneys at Franklin D. Azar & Associates have helped thousands of injured people obtain complete and timely compensation for their losses. Our proven track record and expertise have allowed us to grow into the largest personal-injury law firm in Colorado, with offices in Denver, Aurora, Thornton, Greenwood Village, Colorado Springs, and Pueblo. If you’ve been injured in a bus, car, truck, or motorcycle accident, you may be entitled to compensation.  Please call the car accident attorneys at FDAzar day or night for a free consultation and no-obligation evaluation of your case.