Types of Insurance Coverage Inherent in Personal Injury Claims

Washington law requires all drivers to carry liability insurance. Adequate insurance coverage will ensure that both you and others are protected in the event of unintentional injury in an auto accident.  The most common types of insurance policies that will both help and protect you after an accident will be:

Personal Injury Protection Insurance (PIP) 

PIP insurance covers reasonable and necessary medical bills and wage loss incurred as a result of a car accident.  PIP coverage is used to pay your medical bills and lost wages, regardless of who is at fault for the accident.  This essentially means that no matter who caused an accident, your own insurance company will pay your medical bills and lost wages up to a maximum coverage amount.

Under Washington law, the insurer is obligated to offer each policyholder a minimum of $10,000.00 of PIP coverage when they sell an automobile insurance policy. You are not obligated to purchase PIP. Policyholders have the option to increase this amount.  For now, however, please note that a policyholder does not have to accept this offer.  The policy holder is free to decline PIP coverage, but he must do so in writing.  In fact, the insurance company must prove a policyholder declined PIP, or the company most likely will be required to provide it by default.

PIP insurance is relatively inexpensive and because $10,000 can go quickly and considering the wide range of healthcare providers and other expenses it covers, you may want to consider carrying at least $35,000 in coverage.  If your personal assets and/or income are above average, then you should consider carrying a much higher limit.

Liability Insurance

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Liability coverage is a second type of widely used insurance coverage and is distinct from PIP coverage.  The State of Washington requires all car owners to carry liability insurance coverage of at least $25,000.00 per person.  This means that if you were involved in an automobile accident, and you are found to be at fault, you will have $25,000.00 worth of insurance to compensate an injured party.  If a claim is filed against you because you may be liable for an auto accident, your insurance company may use an attorney of their own to fight the claim and protect you.  If you are found liable for damages that exceed the amount of coverage you elected to purchase (say, the $25,000 minimum), then you may find your personal assets exposed to seizure.

In general, you should consider carrying $100,000 in this type of insurance.  The price differential is generally not significant versus putting your personal assets at risk.  However, if your personal assets and/or income are above average, then you should consider carrying a much higher limit.

Uninsured/Underinsured Motorist Insurance (UIM)

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The State of Washington requires motorists to have liability insurance while operating a motor vehicle.  The State also has strict penalties when this requirement is not met.  Despite these penalties, thousands of drivers in Washington operate a car with no liability insurance.  Underinsured motorist coverage (UIM) and uninsured motorist coverage (UM) are essentially liability policies that help manage the risk if you get hit by a driver with no or minimal insurance and suffer an injury.

Both UIM and UM insurance policies act as a “substitute” insurance for the other driver who has no or minimal insurance.  Both will allow you to make a claim against your own insurance company for the negligent conduct of the uninsured driver.  An easy way to think of this is to simply note that your own UIM and UM policies will basically become the policies of the at fault driver, and you are able to make a claim against your own insurance company as if they were the insurance company for the other driver.

In general, you should consider carrying $250,000 in this type of insurance. However, if your personal assets and/or income are above average, you may want to consider a much higher limit.

Health Insurance

Your health insurance policy may actually become an important asset in the event of an accident.  Generally, if you have PIP coverage, this coverage will be first in line to pay medical bills and any wage loss.  After the PIP coverage has either been exhausted or denied, your health insurance may begin to pick up your costs for treatment of injuries.  This treatment includes such care as: chiropractic care, physical therapy, and prescriptions. Unlike PIP coverage, however, health insurance policies usually have limitations on coverage like copays and deductibles, and annual limits on the number of appointments for certain types of providers (e.g. chiropractors).

Umbrella Insurance  

This is an optional type of insurance coverage that is excess over your liability insurance policies should damages you are liable for exceed all other types of insurance you have in effect.  Umbrella insurance will protect your assets from seizure by providing a high-limit, sometimes including Uninsured Motorist coverage, resource should injuries be catastrophic or just exceed all other available limits. Stated otherwise, if you have a $100,000 liability policy and cause an accident which results in $500,000 worth of damage, you would be covered if you have an umbrellas policy of $500,000 or more.

These types of policies are frequently carried with coverage of $1 – $5 million depending on your net worth.

For a more in-depth review of the legal process after an auto accident, please download one of our free e-books here.

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