By: Candice Iheme, Esq.
Most people do not understand what type of coverage they have on their insurance policies until it is time to make a claim. Unfortunately, it is too late if you do not have the proper coverage on the date of an accident.
You cannot retroactively add it (for the most part).
Below is a brief breakdown of the most popular coverages for automobile insurance policies.
1. Collision Coverage- This coverage will allow your car to be fixed, regardless of fault and subject to your deductible- after your car is damaged during a collision with another car or an object.
Comprehensive Coverage- This coverage will pay for damage to your car resulting from a collision with an animal or due to theft, vandalism, flooding, or a fire. This will also cover damage to your windshield if only it was damaged (e.g., if a rock hit your windshield and cracked it).
3. Personal Injury Protection ("PIP") Coverage- is medical payment coverage for any injuries resulting from an automobile accident. New Jersey is a "no-fault" state; this means that if you are injured in an automobile accident, your medical bills will be paid for by your automobile insurance policy, no matter who caused the accident.
4. Health Care Primary- having this selected on your policy means you must use your health insurance for any medical bills related to your accident. However, receive a settlement due to your bodily injuries. Your health insurance company may have the right to assert a lien against your settlement and be reimbursed for the money paid on your behalf. Selecting this coverage may save you a few dollars per month but could cost you thousands if you are injured in a car accident.
5. Bodily Injury Liability- This coverage will pay for any claim for bodily injuries asserted against you after a car accident. If you receive a letter from a lawyer advising that you are being sued due to injuries sustained in a car accident, call your auto insurance company immediately and provide them with a copy of the letter. They will provide an attorney to defend you. However, if you have a lot of assets, make sure your coverage is adequate. If someone is grievously injured and you have a very limited policy, they could try to come after your assets if you do not have adequate insurance coverage.
6. Property Damage Coverage- This coverage pays for claims due to property damage resulting from an automobile accident that you caused. (e.g., if you got in a car accident, it was your fault, and you damaged someone's car, house, fence, or other personal property).
7. Uninsured motorist coverage will pay for damages caused during an automobile accident with someone at fault and without car insurance.
8. Underinsured motorist coverage- if you are in an accident and there is, let's say, $100,000 worth of damages. The person at fault has a policy where the limits of liability are only $25,000; this coverage will allow you to recover the damages in excess of the at-fault party's policy. (i.e., you would recover $75,000 from the underinsured motorist coverage on your policy).
This article is for educational purposes only and is not meant to act as a substitute for seeking legal advice. Contact an attorney immediately to discuss your options if you are involved with any legal proceedings due to an automobile accident.
Candice Iheme is a personal injury attorney at the Haddad Law Firm in Hopelawn, New Jersey. She specializes in obtaining compensation for victims of automobile accidents, medical malpractice, landlord negligence, premises liability, and beyond. If you were injured due to someone else's negligence, please call 732-933-3535 and ask for Candice for a FREE consultation today. If she cannot help you, she will find someone who will. (P.S. The Haddad Law Firm handles cases in New Jersey, New York, and Florida. However, they can refer cases to personal injury attorneys all over the country).