• Review Your Insurance Coverage
  • August 3, 2016
  • Law Firm: McCready Garcia Leet P.C. - Chicago Office
  • Do you know what your insurance limits are for your car? Most people never give their insurance a second thought - until they need it. At that point, it may be too late. The time to review your insurance coverage is before something happens. This article will provide some guidance on what insurance coverage you should have and why. I encourage you to spend a few minutes reviewing, and perhaps changing, your insurance policy.

    Which insurance company should I use?

    What is the “best” insurance company? Of course, there is no “best” insurance company. All insurance companies are in business to make a profit, not to pay claims. However, I encourage my clients to have car insurance with a reputable, national insurance company. Examples of these include State Farm, Allstate, Farmers, GEICO, Progressive, and others. Stay away from insurance companies you have never heard of before like Unique, Apollo, United Auto, Safeway and others. These insurance companies are considered substandard carriers and should be avoided.

    The main difference between the national insurance companies is whether you deal with an agent or a central call center. When you purchase insurance from Allstate or State Farm, you do so through a local agent. That agent is your contact with the insurance company for all your needs. Insurance companies such as GEICO and Progressive do not have agents and all your needs will be handled over the phone. Which type is better depends largely on your personal preference.

    What types of coverage should I have?

    First, all insurance policies provide liability coverage. This means that if you are in an accident which is your fault, your insurance company will pay to fix the other person’s car and for their injuries. Liability insurance does not cover your car or your injuries.

    If you are in an accident which is your fault, you need full coverage in order to fix your car. If you have “liability only” coverage, you will be on your own with regard to the damage to your car. You need to decide how much your car is worth when electing full coverage versus liability only. If your car is worth more than a few thousand dollars, it is probably worthwhile to get full coverage. Full coverage also fixes your car in a hit and run situation.

    Under Illinois law, insurance companies must offer you uninsured and underinsured motorist coverage. You can waive these coverages, but you never want to do that. These coverages come into play when someone else causes an accident and they have no insurance or insufficient insurance to cover your injuries. One estimate by the Insurance Research Center is that one in seven drivers in the US has no car insurance. What’s more, Illinois Department of Transportation (IDOT) reported that 36.9% of all accidents in 2010 were considered “hit and run.”

    Another important type of coverage is called Medical Payments coverage, or med pay for short. Med pay will pay medical bills for you or anyone else in your car, no matter who caused the accident. You may ask why would I want this if someone else caused the accident or if I have health insurance? Well, med pay can reimburse you for any deductibles you may have. Med pay will also allow you to get treatment while your injury claim in pending. There are many good reasons to have med pay coverage. Also, it is very inexpensive compared to the types of coverage addressed above.

    Finally, many insurance companies offer separate coverage for towing, rental car, roadside assistance and other benefits. These are usually only a few dollars per month extra and I recommend including them in your insurance.

    What limits should I have?

    This is the most important decision you have to make regarding car insurance. In Illinois, the minimum insurance limits are $25,000. If you have the state minimum insurance and you cause an accident which kills someone, your insurance company will pay $25,000. You could be held personally responsible for the excess. While having the state minimum may be slightly cheaper, you should have higher limits.

    I recommend most people carry limits of at least $100,000. This means if you caused an accident, your insurance company would pay up to $100,000 to the person injured in the accident. Except in very serious accidents, this should be enough insurance. However, you may want to consider limits of $250,000 or $500,000 since these limits are not significantly more expensive.

    There is another important reason for having high limits on your insurance. Whatever limits you have for liability will be the same as your uninsured and underinsured motorist coverage. I have had many clients who have been seriously injured or even killed by uninsured motorists only to find out that their limits were the state minimum. Imagine that, your loved one is killed by an uninsured motorist and all you recover is $20,000 because you have the state minimum insurance. Too many of my clients realize they do not have the proper insurance AFTER an accident when it does you no good.

    Review your insurance coverage!

    If you have read this far, take the time NOW to review your insurance coverage. Is your insurance company reputable or a substandard carrier? Not sure, call me and I’ll tell you. Are your limits $100,000 or higher? If not, call your insurance company and increase them. Do you have Medical Payments coverage? If not, call your insurance company and add it.