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The question you should ask yourself is: How much coverage do I really need? The minimum amount the law requires you to purchase is $15,000.00 per individual and $30,000.00 per incident. It is typically written as "15/30". Higher limits are available and should be purchased if you have assets to protect. If a claim for injuries is made against you and the value of the claim is greater than the limits of your policy, as it might if the injured party is seriously injured, the injured party can either accept your policy limits and release you from further claims, or can pursue the claim against you personally for damages in excess of your policy. Therefore, you should buy sufficient liability coverage to protect your assets (home, savings, investments, income, etc.).
In addition to liability coverage which applies to bodily injury (BI) claims, you can also purchase liability coverage which applies to property damage claims. This coverage applies to damage you caused to the other person's vehicle. As the cost of automobiles increases, you should consider buying enough coverage to pay for repair or replacement of a damaged vehicle.
Please be aware that if you cause an accident injuring someone, and your insurance company pays money on your behalf to settle the claim against you, your insurance carrier can raise your premium rates and probably will attach a surcharge to your premiums. Certain rules apply to how and when rates can be raised and surcharges applied. You should contact either your attorney or your insurance agent to have this explained to you.
Party "PIP" Coverage
"UM" coverage may be purchased in amounts equal to or smaller than your liability coverage. You should consider purchasing at least $100,000.00/$300,000.00 limits. If you are injured by an uninsured driver, this is the only benefit available to you. The additional coverage offers you much protection. Ask your insurance agent to give you a price quote so you can make an informed decision about whether or not you can afford the highest limits. Do yourself a favor, do not waive this coverage.
Thresholds - Should you sign away your rights?
"Tort" is a legal term meaning a private or civil wrong or injury, other than breach of contract, for which the law provides a remedy in the form of an action for damages. Thus, were you to select 'full" tort coverage, you are preserving your familyÝs full legal rights in case of an accident or injury. If you select 'limited" tort coverage, you may save some money, but you are signing away your and your familyÝs rights in case of an accident or injury - rights you may later deeply regret forfeiting.
An individual who chooses "full" tort pays a higher premium (anywhere from 12% - 20% more) for coverage than if the "limited" tort option had been selected. If you have full tort, you can bring a claim (and ultimately a law suit) for any injury you suffer as a result of an automobile accident. An individual who chose the limited tort option can only recover very limited sums for injuries sustained in an automobile accident, but cannot collect at all unless the injuries are considered to be 'serious". The law defines "serious" injury very narrowly.
Serious injury is defined as a personal injury resulting in death, serious impairment of a bodily function or permanent serious disfigurement. Although the law has defined "serious injury", you can see from the definition that it is not altogether clear. Case after case has been litigated trying to further define just what the law means by serious impairment of a bodily function.
The recent trend of the courts has been to view most "soft tissue" injuries (neck and back sprains and strains) as insufficient to satisfy the serious impairment requirement. In many cases even broken bones and head injuries have been considered not to meet the law's definition of "serious", although they were certainly serious to the injured party. More and more, courts are finding against individuals who have selected the limited tort option. Some judges are looking at the injury and asking whether or not it resolved. Injuries that have healed and no longer cause pain are not considered serious. One plaintiff had a fractured elbow and missed three months of work. The injury healed and the court found against the limited tort plaintiff.
Although it is not impossible to win a claim if you select the "limited tort" option, it has become increasingly difficult. This means that the insurers are able to collect premium dollars on policies to which, they have greatly reduced their risk of loss. In fact, the insurers risk of paying on claims has been reduced at a much higher rate than the small rate reduction passed on to the consumer who selects the limited tort option. Unfortunately, the only way for an individual to protect him/herself is to pay the higher rates for full tort coverage.
If you are seeking automobile coverage for the first time or are renewing a policy, or simply are curious, please call your insurance agent and ask for a cost comparison between full tort and limited tort for the exact same coverage. Only after receiving this information will you be able to make an informed decision as to which tort option makes the most sense for you.
This informational piece was prepared by Monheit, Silverman & Fodera. If you would like more information on this topic, call us at (800) 220-LAW1, or use the "Do I Have A Case?" button on this web site.
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