Choosing the Right Auto Insurance Coverage

I’m Katelyn Holub, an attorney focusing on personal injury law in northwest Indiana.

Welcome to Personal Injury Primer, where we break down the law into simple terms, provide legal tips, and discuss personal injury law topics.

Quite often, when we conclude a case with a client and hand them their check, the client will ask, “Should I make any changes to my car insurance?”

The right way to look at car insurance is to see it as providing financial protection if you are unfortunate and end up in a motor vehicle collision.

Injury bills and vehicle repair costs can quickly mount up.

Most car insurance carriers offer a variety of coverage choices, including:

• Liability coverage — If you cause a collision, liability coverage will pay any judgment obtained against you by the injured party up to your coverage limit.
• Collision coverage — If your vehicle is damaged in a collision, this coverage benefit will reimburse you for the cost of repairing or replacing it up to your coverage limit.
• Comprehensive coverage — Protects a vehicle owner’s losses due to vandalism, hail, and other similar events up to the coverage limit.
• Personal Injury Protection (PIP) coverage — Will pay towards the cost of medical treatment to passengers injured in a collision, regardless of fault, up to the coverage limit.
• Medical Payments (Med-Pay) coverage  — Will pay for medical treatment costs that any insured incurs as a result of the crash, up to the coverage limit.
• Uninsured and underinsured motorist (UM/UI or UIM) coverage — Will pay for damages insureds sustain in a collision (including medical bills, lost wages, and pain and suffering) caused by another driver who has no liability insurance or low limits liability insurance, up to the coverage limit.
• Guaranteed Asset Protection (GAP) coverage —Will pay the difference between a vehicle’s actual cash value and the outstanding loan amount owed on the vehicle up to the coverage limit.

A common mistake people make in Indiana is buying car insurance that provides just the bare minimum coverage and not choosing a policy with enough UIM coverage to protect them should they be in a crash with another driver who has little or no liability insurance.

Although you hope to never need your UIM coverage, it’s important to take time to think about how much coverage you can afford. Since this coverage protects you when others on the highway do not have insurance or have bare minimum levels of liability insurance, it makes sense to have the most coverage you can afford.

Additionally, people often fail to recognize that GAP coverage is important when purchasing a vehicle, especially if they’ve been sold a loan that is greater than the value of the vehicle purchased.

The minimum amount of liability car insurance coverage you need varies by state. In Indiana, the minimum amount of liability insurance coverage is $25,000 for bodily injury or death of one person, $50,000 for bodily injury or death of two or more people in one accident, and $25,000 for damage or destruction of property in one accident. See Ind. Code § 9-25-4-5.

As attorneys who represent people injured in motor vehicle crashes, we recommend getting an insurance policy with the highest coverage levels that you can reasonably afford.

I hope you found this information helpful. If you are a victim of someone’s carelessness, substandard medical care, product defect, work injury, or another personal injury, please call (219) 736-9700 with your questions. You can also learn more about us by visiting our website at DavidHolubLaw.com – while there, make sure you request a copy of our book “Fighting for Truth.”