Are You Underinsured?

In today’s challenging economic times, the coverage you carry in your automobile insurance policy may protect you more than you realize. Unfortunately, many drivers carry no insurance or allow their policy to lapse (both of which are illegal), and many more only get the state minimum limits.

The mandatory minimum automobile liability coverage (that is, what the responsibility party, i.e., the person at fault in the accident, owes to the injured party) in Indiana is as follows: at least $25,000 for bodily injury to one person; at least $50,000 for all bodily injuries, and at least $10,000 for property damage. This is referred to as 25/50/10 coverage. But again, this is only the minimum required by law, and can be a drop in the bucket in the case of a serious accident. In other words, if you are the responsible party in a serious collision on the road, you could wind up personally on the hook for more money damages beyond what your policy provides.

Operating a motor vehicle in Indiana without liability insurance can result in a driver’s license suspension of three months to one year along with fines.

You can help to protect yourself if you are in an accident that is not your fault by making sure your uninsured and underinsured limits are sufficient to protect you. The state minimums for this coverage are: uninsured motorists–bodily injury $25000/$50,000, underinsured motorists–bodily injury $50,000, and property damage $10,000. All auto insurance policies in Indiana must offer this kind of coverage unless you reject the coverage in writing.

If you or someone in your car is injured in a traffic accident by an uninsured driver, then the uninsured motorist coverage from your own auto policy steps in and provides financial protection up to the limits that you purchased. Likewise if you are in a car wreck with someone who has minimum state limits, then your underinsured motorist coverage steps in to protect you financially up to the limits for that coverage.

You should review your current policy with your insurance agent and inquire as to the additional cost that would increase your current liability coverage, medical payments, and uninsured and underinsured motorist coverage. You will find the additional premiums can be reasonable, and it is much better to put the added protection in place now than to wait until after being in a collision when it is too late.  The additional insurance protection is not retroactive.