Let us show you how switching car insurance could save you $500. We hear this garbage all the time. Nobody likes to spend money on car insurance – me included. But follow along as I tell a story about how saving money on your car insurance could cost you big bucks if you’re in a wreck! The following is a not-so-hypothetical scenario.
You’ve been injured in a car accident. It’s not your fault. You’re really hurt, but the other guy had insurance. You hire a lawyer and he tells you you’re going to see some money. Great case. That’s good news. Until your lawyer takes a look at your insurance policy. You just lost $25,000!
I’ve seen this scenario play out in real life. While the other guy had $100k in insurance coverage my client only had liability coverage. Liability coverage is not always a bad thing. But one little piece of paper with my client’s signature cost him at least $25,000 when the money started rolling in!
I’m talking about uninsured/underinsured motorist coverage or UM/UIM coverage. More often than not people choose things like Medpay or roadside assistance to keep over UM/UIM coverage when it’s time to save some money. But this is a gigantic mistake, folks!
UM/UIM coverage is pretty simple. Uinsured Motorist coverage (UM) covers you if you get hit by somebody who has zero insurance. Underinsured Motorist (UIM) coverage kicks in when the other guy has insurance, but it’s not enough to cover your losses.
UM/UIM coverage is money that you pay for to get back when you’re in a wreck. Think life insurance. You die. Your spouse gets a check. This is not like regular car insurance that pays out only enough to cover your losses such as the value of your vehicle. This is a check for the full amount of whatever coverage you paid for.
The best news is that if you have UM/UIM coverage you don’t have to argue with your insurance company to get your money. If the other guy has no insurance or not enough to cover your hospital bills, then your lawyer makes a couple phone calls and sends a couple letters to your carrier and the check is in the mail once settlement time rolls around!
In Alabama the minimum you can have is $25,000, with $100,000 being even more common. And it costs on average about $30 a month. To add insult to injury if you want to skip out on this easy money you literally have to sign a document refusing it! If you don’t pay for it but you didn’t sign it away then under Alabama law you are still getting at least $25,000 coverage FOR FREE! Imagine how my client felt when I had to show him the one paragraph piece of paper he signed declining this coverage. Had he kept the coverage we could have added $25,000 to his settlement. It was awkward. For everybody.
But don’t beat yourself up too bad if you are one of the folks who decided to leave this money on the table. Insurance agents are trained to not push this type of insurance in the sales pitch. Why? Because unlike Medpay or overpriced roadside assistance you don’t have to pay back a dime of UM/UIM coverage if you need it. It’s your money!
Take two minutes and look at your policy declarations page – the one with all the numbers on it. If you don’t see the acronym UM/UIM anywhere odds are you got suckered into signing it away yourself. Make the phone call immediately before you find yourself in an awkward, expensive situation!