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Will it protect me if I am in a wreck?                             What should my coverage do and what do I need?

You are involved in a crash. There are several steps you need to take immediately depending upon whether you caused the wreck or it was caused by someone else (see prior blogs). Once you get past the initial shock, have seen the doctor and taken care of some of the immediate needs your involvement with the insurance company(s) will begin. There are several potential policies which could apply to your crash. Probably the most important thing to realize is that there is no longer a Standard Policy in Texas. Insurance companies can (and do) write policies which exclude things that most of us would consider basic and the only way to really understand what is and is not covered is to get a complete copy of your policy and read it. Now would be a good time to pull out your policy and review it before you need it. You may find that you need to modify or add some coverage now to protect you later.

Liability coverage – this generally provides coverage for you when you cause a wreck. The minimum limits in Texas are currently $30,000.00. If it is your insurance policy and you are driving your car that is listed on the policy you are probably covered. If someone else is driving your car and caused the wreck your insurance may not cover it (even if they are your own family member). Assuming you are covered for the wreck, you need to make sure to notify your insurance company about the wreck and cooperate with them in defending you (or whoever was driving). Also make sure you instruct them in writing that you are to be informed and provided copies of any and all offers to settle the case. The insurance company may not have the same interest in protecting you and your assets that you think they should. If there is an offer to settle within your policy limits and the insurance company refuses to settle you may be exposed to personal liability for any excess and would need to discuss this with an attorney. If your insurance company refuses to settle when you believe they should, you should request they indemnify you for any judgment and expenses over and above the policy limits (including whatever cost you incur for a personal attorney).

PIP – Personal Injury Protection is required to be part of every auto policy in Texas, unless it is waived in writing. The minimum coverage amount is $2,500.00 but you can get much higher coverage if you choose. PIP covers everyone in the insured vehicle up to the individual PIP limits and covers every insured no matter what vehicle they are in. It covers your medical expenses as well as 80% of your lost wages. PIP is not dependent on fault (meaning it pays regardless of whether you caused the wreck or someone else did) and you do not have to pay it back if you receive a recovery from another source. Note: If you are making a claim under your Uninsured or Underinsured Policy (see below) there may be a credit but not a repayment.

Med-Pay – This is a type of coverage which some insurance companies and their agents push as a “better deal” than PIP. ALWAYS BUY PIP!!! Med-Pay does not cover lost income or wages. It only covers medical expenses and also requires that you pay it back out of your recovery. If your policy has this, switch it to PIP.

UIM/UM – Uninsured/Underinsured – this coverage is required in Texas but like PIP it can waived. Do Not waive your UIM/UM coverage. If you are in a wreck caused by someone who has no insurance or their insurance is not sufficient to cover all your damages, this policy will provide coverage. It gets a little tricky because your insurance essentially becomes the others drivers insurance coverage for this wreck. So your own carrier will be defending the person that hit you and due to some case law in Texas, they have no duty to evaluate or settle your claim until you take them to trial and get a judgment; however even coverage with these limitations is far superior to being injured and having no means of recovery (or inadequate recovery). The UIM/UM policy applies to everyone in the vehicle up to the policy limits and generally applies to claims regardless of which vehicle (and in some cases even outside the vehicle) you are in at the time of the wreck. You do need to check the policy to make sure that a driver or vehicle is not specifically excluded from coverage.

Property Damage – This covers what you would expect – damage to the vehicle, but also damage to the property within the vehicle. If the vehicle is totaled it should pay the value of the vehicle at the time of the wreck. If damaged it should pay to repair it to the condition it was immediately prior to the wreck. Did the crash break your expensive sunglasses, was your computer in the back seat and now doesn’t work? These would be covered under the property damage policy. After a wreck do an inventory and take pictures of anything in the vehicle which was damaged. Don’t forget car seats and booster seats. It is generally recommended that after any crash they be replaced. Under this policy you should (if not get it) rental car coverage. That should pay for you to get a rental vehicle during the time it takes to repair your vehicle. The rental vehicle should be of the same general size and type of your vehicle. If you have a truck they should provide a truck not a compact car as your rental. Under the property damage coverage you may also be entitled to a claim for diminished value. This is when your vehicle has less resale value due to it being in a crash. The value will generally be determined by an expert who will be able to provide the proof in difference to the insurance company.

Every wreck is different, but one common denominator is that they are all unpleasant. Expect the best, plan for the worst. Review your policy now to determine what coverage you currently have and what you may need to change. If you are involved in a wreck and have questions, give us a call. We are here to help.