Car insurance questions.

Rhino

If I have health insurance, do I need PIP insurance?

What happens if my "Bodily Injury Liability & Property Damage Liability" is to low? Say I have $100K for property, but do $500K worth of damage. Do I have to pay that $400K out of my own pocket? If so, what happens if I don't have that kind of money?

Do I need a lot of Uninsured motorist coverage? Couldn't I sue if they are at fault and don't have insurance?


edit: also any tricks to lower your insurance rates? I have a car alarm.

zilo

1) no, not really. The only good thing it covers is lost wages but... eh. It is mandatory in some states though.
2) Yes, you're on the hook for the other 400k. If you don't have that kind of money the court will figure out how you'll be paying, probably out of your wages. It's actually not very common to go over the normal 100/300 limits. Just don't get drunk and hit a Bentley full of people with osteoporosis.
3) No, not at all. There are 2 kinds- UMBI (bodily injury) and UMPD (property damage). UMBI covers injury and lost wages if you are injured by an uninsured motorist- double-covered by your health insurance except for the lost wages. UMPD covers some damage (generally $3500 max) to your car if you're hit by an uninsured motorist, double-covered if you have collision coverage. Basically, UM coverage is a scheme invented by insurance companies to get you to give them more money based on fear of filing a lawsuit.

My thought is, if I'm hit by someone without insurance I can sue them for lost wages, damage, and pain and suffering. I'd rather do that then pay a bunch of money every month for shitty, incomplete coverage. You just have to ask yourself, how much are you willing to pay to not have to go to court?

Rhino

That's good info. Thanks for the time relaying that.

In terms of the 100/300K limit (for 2) - is there any stats/data on this? Say you get in an average wreck, what's the average/median for that? At worst, they total the car, and that is what... 10K to $30K?

Thinking about UM UMBI/UMPD more, I guess if they don't have money for insurance, they probably won't have enough cash sitting around to pay a huge bill out of pocket.

darqness

You could sue if you are not at fault, however you may not get anything unless Thurston Howell III hits you.

I was at fault in a large accident involving two large granite trucks in 2009. I was T-boned by one, which flipped on its side and slid into an oncoming granite truck. The driver of the one that flipped tried hitting me with a lawsuit for $400,000. However I was living with my parents, and the only piece of property I had was destroyed in the accident. From speaking with my insurance agent, the driver could either take my $60,000 worth of insurance coverage for injury and lost wages, or try and take me for $400,000 which would have been un-successful and drawn out. He couldn't have both.

Needless to say he took the insurance money.

Djeet

I don't think you get an alarm discount on car insurance unless your alarm has a perimeter shock sensor. Defensive driving will give me a 10% discount good for 2 years, so it's worth it IMO. Do you have life insurance, homeowners/renters insurance, or other types of insurance? If so you can see if the insurer for those policies might give you a multi-line discount if you do auto with them too. I'm assuming your health insurance is employer-provided and thus you won't get any multi-line benefit from that. Are you a AAA member? If so ask them for a quote. Also Amica can be a good deal if they write policies in your area.

You tend to get discounts for being a longtime customer, having multiple lines of insurance through the same company, and for the other reasons stated above. Also increase your deductible to $1K if they're quoting you $250/500 deductible policies.

tinwhiskers

UM is basically there to cover you if you get hit by a poor person. Its utility depends a lot on where you live/drive. For example I used to live in a neighbor hood in Chicago that..lets just say the INS would have been very scary to a lot of my neighbors. If someone were to have hit me and hurt me badly...I'm not getting shit.

The other thing is UM pays, and then the insurance company sues the person. So if you are in a situation where being out of work for a month would make you miss rent payments ect, being able to get the money right away rather than at the end of a lawsuit, and then if you do get anything probably in some god awful slow payment schedule, could prove pretty important.

zilo

Yeah, but it's important to distinguish between UM injury and UM property. UM property is unredeemably shitty. UM injury is double-covered by health insurance.

I think it's a scam, but I'm of the "high deductible, only claim for major stuff" school of insurance-buying.

witch_ie

I'm not sure, but I think it was my uninsured motorist coverage that also worked in my favor in a hit and run - resulting in me getting my deductible back and in my insurance company paying for pain and suffering. In my case, the person at fault (not me) gave false information to the police including expired insurance information and then, according to my insurance company disappeared. My insurance company ruled it a hit and run / uninsured motorist. For me it was totally worth it.

Madpoet

Kind of along these lines, something I've been wondering:
Is there a cap on what someone can recover as far as the value of a vehicle anywhere? Seems like someone driving around in a Bugati would put everyone else on the road at risk of being completely wiped out financially should a bad (or even moderate) accident happen. Maybe the owner would be kind enough to not try to recover past the insurance limits, but I picture alot of those owners being the sort to have a fuck em all mentality and the cash to get the best justice on the market.

Orestus

Former insurance claims adjuster here. In theory yes, driving around in a $250k dollar sports car is putting your fellow motorists at risk of financial ruin; in practice however it doesn't generally work out that way, because the aggrieved party ends up being the Bugati driver's insurance company, not the driver himself. In most cases I had involvement in where the damage caused exceeded the at fault party's liability limit, the damaged party's insurance company paid the damage, and then approached our company about the damage. We would pay out the max property damage allowed under the policy (say 100K).

At that point, we (the insurance company) have discharged our obligation to our customer. If the other insurance company (the company, not the sports car owner) wants to attempt to collect the remaining amount, they are free to seek legal action against our customer. They never do this because in the vast majority of cases that have tried this, judges have confirmed that the responsible party had reasonable liability insurance and declined to then bleed them dry further on behalf of an enormous insurance company.

It's not really a question of the owner's of those cars having a certain mentality. Since they have their own (very expensive and specialized) collision coverage for damage to their own vehicles, they are made whole by that policy. Even if they are super-pissed off at the person who hit their Bugati with their Honda civic, they have no right to demand their company go after the other party for anything (its in the policy they signed, trust me).

While its certainly possible that someone driving one of those cars could have chosen to forgo collision coverage for their vehicle, and therefore themselves be the aggrieved party, they will get even less far with a judge when they have to explain why they chose to not obtain reasonable collision coverage on their 250k sports car.

Orestus

I should add to the above...where you can get in trouble with low property damage deductibles is when multiple aggrieved parties are involved. Crashing into a super expensive sports car is obviously very rare. What's more common would be something like the following:

You, driving your SUV, take your eyes off the road for 5 seconds and fail to see everyone has braked in front of you on the highway. You hit the car in front of you at 40 mph, totalling that car, which is pushed into the car in front of it, totalling that car, which is pushed into the car in front of it, damaging that car. If you've skimped on your property damage liability (say <50k), you may have some issues here. Maybe the guy in front of you had his $5,000 golf clubs in the back seat too, and those are ruined. Rare, but it does happen.

Thanatos

Let me hit up your initial questions first, and then explain why Zilo doesn't understand what he's talking about:

PIP: PIP is actually really nice. Some states mandate it for a reason: it's really cheap, and really easy to get to pay out. I would look at how much it costs you (answer: probably not much) and consider whether or not it's worth it. Back when I drove a car, I totally had it. I mean, don't get me wrong, if you never get in an accident, it's useless, but if you ever are in an accident, it's really nice not to have to worry about paying for shit.

Liability and UIM (under-/un-insured motorist) really get into what you, personally have at stake. The point of UIM insurance isn't so that you can be lazy and not sue someone; it's so that when a six-time ex-felon drunk driver carrying the bare minimum 10/25k liability policy runs into you and sticks you with a $500,000 hospital bill, you're not stuck suing him and then garnishing his paycheck from McDonald's to try to recover it. A judgment against someone without any assets is literally worthless; there's no real way to collect on it. And what type of people generally drive around uninsured, or with not enough insurance? People without a lot of assets. Personally, I'm inclined to say that if you don't have a family to take care of (wife, kids, elderly parents, whatever), you probably don't need UIM insurance, since if you get too fucked up in a car accident, it's only you getting fucked. However, if it's going to ruin a bunch of other people's lives as well, it's probably a good idea to have it.

Similarly, with liability insurance, it will depend upon what you own. If you rent, don't have much in savings, don't own a home, and don't have a wife and/or kids, you probably don't need much. 100k/300k is probably enough for most people with a small family home or condo, and decent savings. If you're bucks up, though, you may want to look into a larger policy (or start looking into an umbrella policy).

MushroomStick

Why is everyone debating the worth of UIM insurance so much? I think it adds like $7 to my 6 month premium. Is that not typical?