TYPES AND LIMITS OF COVERAGE
Liability coverage protects you or another driver insured under your policy if either of you are found legally responsible to pay for someone else’s injuries, damages or losses arising from an accident. This coverage will pay damages for bodily injury and property damage. Bodily injury is broadly defined to include the sickness, injury, or death of another person. This typically includes economic losses, such as medical bills and wage loss, as well as non-economic losses such as pain and suffering, provided such losses arise out of a bodily injury. Property damage covers financial losses arising from the damage, destruction or loss of use of another person’s property. Since liability coverage protects you and your personal assets, it is one of the most important coverages you can buy. Washington law only requires that you have minimum bodily injury liability limits of $25,000 per person/$50,000 per accident. The lower “per person” limit is the maximum amount of coverage available to a single injured person for a given accident. The higher “per accident” limit is the maximum total amount of coverage the insurer will pay when more than one person is injured in the same accident. However, no matter how many people are injured or how serious the injuries are, the per accident limit is the maximum amount of coverage available to protect you. These minimum limits are often insufficient to cover the damages caused by a serious accident, especially with medical costs skyrocketing. If your liability insurance limits are not sufficient, the person injured by you may come after your personal assets. For your own protection, you should thus buy the highest liability coverage limits you can afford. Purchasing high liability limits is also important because these limits will also determine the amount of underinsured motorist coverage (UIM) available to you. You should buy the highest per person coverage you can afford and that coverage amount should be the same coverage as your per accident limits. This is known as a “single limit” policy. Under such a policy, anyone person can recover up to the limits, and this same limit will be the maximum the insurer will pay if more tban one person is injured in a given accident. A single limits policy thus provides you with more protection than the split “per person”/”per accident” liability policy. If you can afford it, you should buy at least $500,000 single limits liability coverage. You should have property damage liability coverage of at least $50,000 and preferably $100,000. If you have had other accidents, however, or have a bad driving record, you may not be able to purchase coverage above the minimum limits required by state law.
Personal Injury Protection (PIP):
PIP pays for medical expenses and wage loss for you and other passengers in your car, regardless of who caused the accident. It also covers pedestrians and bicyclists who are injured in an accident with you. Although you are not required to purchase PIP coverage, we recommend that you buy the maximum amount of PIP coverage available.
PIP coverage provides for payment of medical expenses, wage loss benefits, burial expenses, and other services such as home nursing care and domestic help during recovery from an injury. Unlike health insurance, there is no deductible or per visit out-of-pocket co-payment. So long as the charge is reasonable, necessary and accident related, PIP should pay 100% of a given medical bill. Thus, even if you have medical insurance, it is still recommended that you purchase PIP coverage on your auto policy. PIP benefits are limited by a maximum dollar amount and for a specific period of time, whichever comes first. State law requires that PIP coverage be offered and that it meet certain minimum requirements. You will automatically have PIP coverage in the minimum amounts identified below, unless you (or your spouse on a joint policy) reject this in writing. For medical expenses, the minimum coverage is $10,000 for bills incurred within three years of the accident. Funeral expenses up to $2,000 must be covered, and wage loss benefits for one year after the accident (with a 14-day waiting period) up to $10,000, must also be offered. Benefits for such services as home nursing care and domestic help – known as “essential services” – must be available for a minimum of $5,000. RCW 48.22.095.
Insurance companies are, upon request, also obligated to offer higher PIP coverage – at an additional cost – for payment of medical expenses up to $35,000, and for loss of services up to $40 per day for up to one year from the date of the accident. RCW 48.22.100.
Despite the trend toward making PIP coverage more available, many insurance companies are becoming increasingly aggressive in restricting payments for treatment they consider “unreasonable” or “unnecessary.” For instance, insurers are increasingly likely to attempt to cut off PIP payments before one year when chiropractic care is involved. Usually this is done by them demanding that you attend an “Independent Medical Examination” (IME) with a doctor of the insurance company’s choosing. If you refuse to attend such an examination, your PIP benefits will also likely be suspended or terminated. You should immediately talk to a lawyer if your insurance company attempts to restrict your PIP coverage following an accident, or demands that you attend an IME.
Underinsured Motorist Coverage (UIM):
Despite the fact that auto insurance is mandatory in Washington, many people nevertheless drive without any insurance or without adequate insurance to fully compensate an injured person. As noted above, mandatory insurance laws require liability coverage of only $25,000 per person/$50,000 per accident, which given rising medical costs is often insufficient to cover the damages caused by a serious accident.
Underinsured Motorist Coverage (UIM) covers you, members of your family, and other people riding in the car against damages caused by an uninsured or underinsured motorist, up to the amount of the UIM coverage purchased. This coverage also extends to you or members of your family who may be injured by an uninsured/underinsured motorist while you are a pedestrian or riding a bicycle.
That’s why it’s important, if you experience an injury or loss caused by a driver who is uninsured or underinsured, to have your own UIM. UIM coverage is considered so important that the law requires insurance companies to offer it to all customers. RCW 48.22.030. The amount of UIM coverage offered must be the same amount as your liability coverage unless you make a written request for less coverage. Again, UIM coverage will exist by law unless it was rejected by you (or your spouse on joint policies) in writing.
As with PIP coverage, UIM is a very affordable coverage that should always be purchased. You should never waive this coverage or reduce it below your liability coverage to cut costs. Consider paying higher deductibles or even dropping collision or comprehensive coverage instead. There are simply too many uninsured and underinsured motorists on the road today. You may also buy UIM property damage to pay for damage to your vehicle caused by an uninsured or underinsured motorist. You will not need coverage limits any higher than the value of your vehicle. This coverage overlaps with collision coverage since both cover damage to your vehicle, but there may be different deductibles.
Collision coverage pays for damage to your vehicle from an accident or collision regardless of who may be at fault. Collision coverage pays for repair or replacement of a vehicle, up to the fair market value of the vehicle, subject to a deductible which may range from $250 to $1,000. You can reduce the cost of this coverage by choosing a higher deductible amount. Your cost can also be reduced by not carrying collision coverage on older vehicles which have lower values.
Comprehensive (or “Other than Collision”):
This coverage protects your vehicle from damage caused by fire, theft, vandalism, weather, glass breakage and contact with an animal. Note, however, that this coverage usually does not cover such “portable” items as cassette tapes, CDs, personal music devices (iPods, etc.), tape decks or cell phones. Coverage for these items can typically be added by specific endorsement. The recommended deductible for comprehensive is $100 – $500.
Other Insurance Options:
Other coverage which is typically offered includes towing and car rental. For a small additional cost, these benefits are usually worthwhile to have on your policy, as towing and car rental costs can be substantial if you are hit by an uninsured driver and have no other way to obtain coverage for these items.