When buying auto insurance, there are two main types of coverage to choose from:
- A Standard Policy usually provides minimum liability coverage (which will protect your assets) and uninsured motorist limits of $15,000 per person/$30,000 per accident for bodily injury, and $5,000 for property damage. However, these numbers can be adjusted according to your personal needs.
- A Basic Policy provides $15,000 of medical expenses if you or a family member in your home are injured, but does not include insurance benefits such as income continuation and bodily injury liability coverage. This number can increase if there has been brain or spinal injury. Also, the Basic Policy will not cover you or a family member if injured by an uninsured or under-insured motorist.
A Standard Policy also contains Personal Injury Protection (PIP), which provides for medical expenses up to $250,000 PIP per accident. In 1999 the auto industry began allowing consumers to purchase lower PIP levels, of $15,000, $50,000, $75,000 or $150,000. However, in the case of more serious or permanent injuries, the $250,000 limit still applies. You can also opt to have your personal health insurance cover you on your auto policy; however, your health insurance plan may not cover auto accidents and may not provide coverage for all of your family members.
In 1998 the creation of the “Tier Rating” reformed the auto insurance industry. With this rating, drivers are designated to a specific tier according to risk characteristics, such as: driving history, coverage limit, vehicle type, and years of driving experience. These risk characteristics vary by company, and as a result the insurance companies had to prove that their tiers were based on loss experience and were revenue neutral, and not arbitrary or unfairly discriminatory. Therefore, when deciding on an insurance provider, it is important to compare rates from several companies to find one that suits your specific needs.
Choosing a policy can also affect your ability to carry out a car accident lawsuit. When deciding on a plan, you will have to choose either a Threshold Policy or a No Threshold Policy. The No Threshold Policy (a more expensive alternative) enables you to sue, despite the severity of an injury. You must ask for the No Threshold Policy when you purchase a plan, or else the Threshold Policy is given by default. If you chose the Threshold Policy and you or a family member is hurt during an accident there will be no recovery of money to compensate for pain and suffering. The only way you would be able to receive money in this case is if certain specified injuries occur, such as: death, dismemberment, significant disfigurement or scaring, displaced fractures, loss of fetus/pregnancy, and permanent injury within a reasonable degree of medical probability (other than scarring or disfigurement). Injuries are classified as permanent when the organ/body part has not healed and therefore is not able function normally and will not be able to function normally with continued medical treatment.