Although a driver may think he or she has complete coverage, there are a number of instances in which a policy may not cover the full amount of damages in a car accident. There are many different types of policies, and not having any particular one may decrease the amount you are awarded in compensation. The following FAQ explores some of the finer points of insurance coverage so you can more fully understand what different policies cover.
What is underinsured motorist coverage?
Under California law, any motor vehicle operating in the state must have certain minimum amounts of car insurance. The insurance must include, for example, at least $15,000 in coverage for the death or injury of another person, $30,000 for injury or death to more than one person, and $5,000 in coverage for property damage. These policies, however, are simply the minimum required amounts – any damage above this amount must be paid for at personal cost the driver who was at fault. Now, think of how much damage is in a typical traffic accident, even if no one was injured. Generally, $5,000 can barely cover a new bumper on a car, and $15,000 may be able to cover some minor injuries, but any significant medical costs will go way above and beyond that amount. If an at-fault driver is underinsured, and does not have the financial resources to cover the rest of the costs after you bring a lawsuit against the driver in court, you may be stuck paying for some of the bill.
If you have underinsured driver coverage, you will receive compensation when you are in a car accident and the other person is at fault. These can include medical expenses, pain and suffering compensation, and compensation for lost wages. Underinsured driver coverage, however, is often times not part of a normal insurance package. Look into your insurance to see if this is something you have in your policy.
What is uninsured motorist coverage?
There are also many drivers on the road without any insurance at all. If you are injured by a driver who does not have insurance, and are looking for coverage to pay for the cost of your injuries and damage to your car, uninsured motorist coverage is the avenue through which you would receive this compensation. Uninsured motorist coverage typically extends to anyone you allow to drive your car, and anyone riding in a car you are driving but do not own. If you do not have this coverage, and are in an accident with an uninsured driver that does not have the money to compensate you, you will have to pay all of your expenses out of pocket.
Will my policy cover rental reimbursement?
Your insurance policy may not automatically cover the cost of renting a car while the vehicle you own is being fixed. Often times this part of a policy must be added in addition to the ‘full’ basic insurance car insurance companies offer. The cost of renting a car can quickly add up if your vehicle has been severely damaged.