You got in a car crash and you got hurt. It wasn’t your fault. Now, you’ve got medical bills and you’re in pain all the time. So, where does the money to cover all your damages come from?
In general, the money to pay for your medical treatment, lost wages, out-of-pocket expenses, and all your other damages comes from the automobile insurance companies. This article summarizes the different types of automobile insurance coverages, and how they fit into the larger picture of personal injury.
Automobile Liability Insurance
The person who hit you (the at-fault driver) is required under Colorado law to carry at least twenty-five thousand dollars in automobile liability coverage. If you look at your liability coverage on your insurance declarations page, you will see two numbers, typically separated by a backslash. For instance, “25/50.” This means the coverage is good for up to $25k per person, and up to $50k per occurrence. Therefore, if one or two people were hurt then the maximum recoverable per person from that policy is $25k (+$25k=$50k). If three or more people were hurt, then the maximum all injured people combined can recover is $50k.
Hopefully, the at-fault driver is carrying insurance and hopefully their policy limits are enough to cover your damages. However, it is unfortunately very possible that the at-fault driver either did not have sufficient liability insurance to cover your damages, or they did not have any automotive insurance at all.
Uninsured/Underinsured Motorist Coverage (UM/UIM)
If the at-fault driver did not have insurance, or their liability insurance limits were too low to cover all your damages, you can turn to your UM/UIM coverage. In Colorado, insurers typically offer UM/UIM coverage up to whatever your liability coverage limits are. For instance, if you have a 50/100 liability policy, you can select UM/UIM for up to fifty-thousand dollars per person, and one-hundred thousand dollars per occurrence.
Resorting to claim under your own UM/UIM coverage should not increase your insurance rates. After all, you paid for the coverage.
Now, suppose the at-fault driver had Colorado minimum liability coverage of 25/50, but your damages add up to fifty-thousand dollars. In that case, if you have UM/UIM coverage, you should be covered because the minimum coverage you can have is 25/50 (remember, UM/UIM matches your liability coverage amount which must be at least 25/50 in Colorado). So, you could recover twenty-five thousand dollars from the at-fault driver’s liability insurance, and twenty-five thousand from your UM/UIM insurance. However, if your damages were higher—say, seventy-five thousand dollars—then you could be in some trouble, because in our example the at-fault driver’s insurance covers you for twenty-five thousand, and your UM/UIM can cover you for up to an additional twenty-five thousand dollars. This adds up to fifty thousand dollars—a twenty-five-thousand-dollar deficit. The best way to avoid finding yourself in such a situation is to purchase as much UM/UIM coverage as you can afford in your insurance payments.
Medical Payments (Med Pay)
The third type of coverage is Med Pay. Med Pay is “no-fault,” meaning you are eligible to claim Med Pay benefits even if you were hurt in a crash that was your fault. Typical Med Pay coverages start at five thousand dollars and go up from there. Med Pay can be used only for reimbursement for medical expenses, so it is not sufficient to cover other damages you may incur, such as pain and suffering, lost wages, and disability or disfigurement damages. Nonetheless, it is always a good idea to have some Med Pay coverage, even if it is the minimum five thousand dollars, since that should help with any medical treatment co-pays or deductibles through your health insurance.
It is important to note that all three coverages described here are for personal (bodily) injury only. The limits do not apply to your property damage, including damage to your car. Property damage is handled separately from bodily injuries, and the limits we’ve covered are only applied against damages relating to your personal injury.
It is also a good idea to purchase “collision” coverage, so if the at-fault driver is uninsured you can get your vehicle repaired without going completely out of pocket.
Check your insurance to make sure you have at least some UM/UIM and Med Pay coverage, so if you or a loved one is injured in a car wreck, you’ll be covered. If the worst does come to pass, give an experienced attorney at Bell & Pollock, P.C. a call at 303-795-5900 so they can help you set up your Legal Game Plan to deal with the insurance companies.