Types of Auto Insurance
When dealing with a car wreck in Amarillo, you need to be able to understand the different types of insurance that might be available for your case. For car wrecks we deal with Liability, personal injury protection (called PIP), under-insured and uninsured insurance.
The State of Texas requires all vehicle owners to carry liability insurance. Your liability insurance pays for car damage, property damage and for injury claims to other people for car wrecks that you cause. When someone else causes a wreck, their liability insurance is where we go to pay for your damages and injuries. Liability policies have many, many provisions and we will talk about just a couple here. The policy limits is the maximum that the insurance company can be made to pay. There is a per person limit and a per-accident limit. The minimum amount of insurance a driver must carry in Texas is a $30,000 / $60,000 policy. This is usually just abbreviated to 30/60. There are other amounts available. A person can buy a 50/100, a 100/300 and so on depending on the insurance company and the amount of coverage you want.
How do insurance policy limits work?
If the person who caused the car wreck only carried a minimum policy of 30/60 then the most the insurance company could be made to pay is $30,000 to any single person and a combined maximum of $60,000 for all persons injured in a single event. Lets walk through an example to help understand this.
Roger is driving down the road and decides to check his text messages. While looking at his phone and not paying attention to the road he rear-ends Jennifer’s car. Jennifer had two passengers, Susan and Carie. John has a 30/60 policy. This means John bought insurance that could pay up to $30,000 for a single person and up to $60,000 for all persons in a single event. The most that Roger’s insurance company can be made to pay is a maximum of $30,000 to any one person and a maximum of $60,000 for all three of the victims, Jennifer, Susan and Carie. What if Susan’s injuries caused her to have medical bills that were over $50,000? The most the insurance could ever be made to pay on Susan’s injury case is still only $30,000. As you can see, a minimum insurance policy doesn’t go very far in a car wreck.
What if the liability insurance isn’t enough?
Many Amarillo drivers choose to have what is called Uninsured and Under insured insurance. Uninsured insurance will cover your injuries when someone else hits you and they don’t have any insurance. Under insured is like a safety net when the person that hit you doesn’t have enough insurance to cover all the damages. Using the example above, if Roger didn’t have any insurance then each person in the other car (Jennifer, Susan and Carie) could use their own Uninsured insurance. If Roger had only a 30/60 policy, then Susan’s Under insured policy will add on top of Roger’s $30,000 to provide more money to pay for Susan’s injuries. From the example above you can see why it is so important for every driver to have Uninsured and Under Insured insurance. The cost to add this to you insurance policy really isn’t that much more. I have seen many, many people who suffered terrible injuries and ended up walking away with very little money or none at all because they didn’t have Uninsured or Under insured insurance.
Why you should have more than the minimum liability policy.
Buying the cheapest minimum liability policy is tempting, but it is very risky. What can happen when Roger only has $30,000 to cover Susan’s $50,000 injury? Susan could sue Roger in court and maybe get a jury award for a very large amount of money. Let’s just say that Susan wins at court and the Jury awards her $50,000. In this example, Roger’s insurance pays their required $30,000 and Roger is left owing Susan $20,000. Can Susan actually collect the $20,000 from Roger? Susan can get it only if Roger actually has $20,000. You can’t take his car, his house, or many other types of protected property. However, Roger’s credit is ruined and he will not likely be able to ever buy a house. Roger’s driver’s license might also be suspended until the $20,000 is paid. Don’t buy the minimum liability policy. It could ruin your life if you cause an accident. Personal Injury Protection (PIP) is a no-fault insurance. If you have PIP then it can pay for your medical bills and lost wages no matter who caused the accident. It is very cheap and everyone should carry it. PIP generally comes in policy amounts of $2,500, $5,000 or $10,000.