A couple of weeks ago, I posted an article called “You Can Save Money On Your Car Insurance By NOT Switching Companies” where I pointed out how some companies will offer loyalty and muti-line discounts by staying with them for a period of time.  The feedback from the article was mostly very positive, but a good friend of mine who works for City of St. Louis Attorney’s office started calling me out a few days after the article was posted.

As we often do here at See Debt Run, I had posted detailed numbers on the exact Coverage that we currently had and what we were paying.  When my friend saw this, he quickly identified that our coverage was woefully insufficient.  He went on to explain that he had to deal with people all the time who had hit uninsured motorists, damaged property, or –God forbid– had accidentally killed someone.  If you don’t have the appropriate insurance levels, these situations can often get you sued, your wages garnished, and basically leave you in a state of complete financial ruin.  I probed my friend for more details and he agreed to be interviewed so that we could share this knowledge with my readers.

First a little background:   My friend has been the Legal Investigator/Claims Administrator with the City Counselor’s Office for the City of St. Louis for the past 6 years.  He handles all property damage and bodily injury claims against the City of St. Louis, and recovers money for City property that was damaged by citizens.  He has dealt with every major insurance company on numerous occasions.  The City of St. Louis, like many other cities in the US, is self-insured.

 Q: What happens if someone causes damage of an amount greater than their insurance covers?

A:  If someone causes an accident which causes more damage than their policy covers, it could leave them open to a lawsuit.  When someone damages City of St. Louis property, we typically proceed with further recovery efforts until we get close to 100% of the cost of damages.  That means we would hold the individual responsible for paying the rest of the money.  If they do not cooperate, they could face legal action against them.  If a judgment is received in our favor, then that person’s wages and bank accounts could be garnished without warning.  If they do not have any insurance, their driver’s license could be suspended for 10 years if we receive that judgment in our favor, or one year without a judgment.

Q: What happens if you have an accident with someone who doesn’t have insurance?

A: If you have an accident with someone without insurance and you have uninsured motor vehicle coverage, your insurance company should take care of the damage.  If you do not have uninsured motor vehicle coverage, you are on your own to pay for your vehicle’s damage and recover the money from the individual.  To do that, you may need to hire an attorney, which will cost you some money in which it may not be worth it to go after.  As the cost of insurance increases, there are more and more people who drive without insurance.  Unfortunately, I recover money for City property damaged by uninsured motorists on a daily basis.

Q: When you read my post on car insurance, you mentioned that you thought my coverage was far too low.  What concerned you the most?

A:  Bodily Injury Liability, Property Damage Liability, uninsured, and underinsured.   As far as Bodily Injury:  If you were to accidentally kill someone, a plaintiff’s attorney is more likely to accept $300,000 then $100,000 for their client’s dead relative.  As for property damage, $50,000 is not enough.  If you were to cause a multiple-vehicle accident, you could easily exceed $50,000 if dealing with newer cars.  If you were to cause an accident in which a building was damaged, you could easily cause that much damage, too.  As for underinsured:  the minimum amount of liability coverage required by law for property damage is $10,000.  For injury it is $25,000.  Frequently, accidents cost much more than this.  If another vehicle hits you and another car and there is $10,000 worth of damage to your car and $10,000 of damage to the other car, you would only get $5,000 and you would be left with the rest to pay yourself.  Your own insurance company would not pay you anything and you would be out $5,000.  I would raise your uninsured as well.  It seems some of the worst drivers are those who do not carry insurance.  If one of those drivers runs a red light, t-bones you and were to kill you, would $50,000 be enough for your wife?  Uninsured drivers typically do not have a lot of money, a job, or bank accounts, so you would not receive much from the other driver, if anything, even if you were to get a judgment in court.

Q: Are some insurance companies better than others?  Is there anything they can do to help keep you from getting sued? 

A: Just like anything else, some insurance companies are better than others and some are worse than others.  If you have proper coverage, it is an insurance company’s responsibility to not get you sued.  Fortunately, if you were to get sued, they should provide you an attorney.   We have had to sue insured individuals for no response from the insurance company after months of trying to resolve the claim.  In the end, they still have to pay us after we get the judgment.  The problem is that judgment goes against the individual and not against the insurance company.  Sometimes cheaper is not better.  Something to consider when looking for an insurance company is the claim process if you ever had to make a claim.  State Farm, for example, uses a team approach, so any of their adjusters on the team can help you with your claim.  Most companies, however, assign your claim to one adjuster.   Adjusters are typically very busy and hard to get a hold of.  When looking for insurance, I would ask about the claim process and if a team or one single adjuster would handle your claim. The best thing you can to do to prevent  from getting sued is having proper insurance coverage.

Q: What coverage levels would you recommend to properly protect yourself?

A: As much as you can possibly afford.  The goal is to not get sued for not enough coverage or be out of my own money.  Personally, I have: Liability:  Property damage: $100,000,  Injury: $300,000.  Uninsured:  $100,000.  Underinsured:  $100,000.  I have $500 deductibles and full rental car.  Rental car is extremely important.  It is typically under $15 to put on your policy, and if you get in accident, you will want to have a rental car available for you.  If someone was to cause damage to your vehicle, it is not their insurance company’s responsibility to get you in a rental car right away (though they should reimburse your insurance company later).  In an accident rental cars are usually needed between 7-14 days.  Something comparable could cost $40 a day.  I would at least have 80% Coverage on that, but you may find full coverage is only $5 bucks more on a 6 month policy.

I just want to add that an accident can be financially devastating for all involved without the proper insurance.  Having the proper coverage will prevent that and give you peace of mind that your accident will be taken care of and you will be made whole for the cost of your deductible.

After talking to my friend, we contacted our insurance agent to bump up our coverage per his recommendations.  These changes only increased our monthly bill by $10, a small price to pay for peace of mind.  Many thanks to my friend for taking the time to share this information with our readers!  If you ever read anything at See Debt Run and feel that you have more information on that topic that would benefit our readers, please don’t hesitate to reach out to us!