What if you are involved in a car accident and the other driver has little to no coverage?Financial Planning Insurance
A 30-second read by Victor Cannillo: Car accidents are inevitable, no matter how carefully you drive. Most of us have been taught to drive defensively – make sure to look out for the other driver to anticipate a dangerous situation and hopefully prevent a potential accident. That can be true of auto insurance policies, as well. We all have car insurance if we own a car, but some drivers may be underinsured, or even uninsured. What if you get into an accident with an uninsured driver or a driver who has only $25,000 in insurance, what happens to the driver who is properly insured and/or has umbrella insurance?
We posed this very question to William Luyke, a Sales Executive with United Assurance in Fair Lawn, New Jersey. According to William, “every auto policy in NJ has a coverage for “uninsured/underinsured”. He goes on to say that “should you have $500,000 of coverage and be hit by a driver who either has no insurance or the state minimum of $15,000, and you need to sue them, we will use up their limits of $15,000 and then the claim will revert back to your limits for any shortfall should you win an award in court.”
This is one of the limits that people do not understand – that some carriers will give you $250,000 of “liability coverage” which protects you if sued, however they usually only offer $15,000 of “uninsured/underinsured” limits to try and lower your premium. This is the coverage that protects YOU in the event of a claim with an individual who is not insured adequately.
Although Baron Financial Group does not sell any insurance products, please let us know if you need help planning for your insurance needs.
Please reach out to the Baron Team if you have any questions.
Disclosure: This is a general communication being provided for informational purposes only. This material is not intended to be relied upon as a forecast, research, legal, tax or investment advice.