Important Insurance Coverages

Robert I. Feinberg

03 November 2008

For over twenty years my firm has been writing to clients about auto insurance. The purpose has been to inform consumers that they purchase enough coverage to protect themselves not only from a lawsuit but in the eventuality that the at-fault driver has no insurance or insufficient insurance. This requires having enough protection under three coverages: Bodily injury to others; bodily injuries cause by an Uninsured auto; and bodily injury caused by an Underinsured auto. For each of these parts, the minimum amount set by each of the states may not be enough to protect you and your household members. Uninsured and Underinsured coveragae come into play when there is no insurance or little insurance on the so-called tortfeasor. Often this is referred to as “U Coverage” and it should not be ignored.

You should also be alert to certain insurance company defenses:

• If the place of garaging for your vehicle is not accurate, the insurance company can refuse to pay your optional coverage if ther “risk of loss” is greater, i.e. if they were entitled to a higher premium.
• If you fail to list an operator who is required to be listed, then the insurance company can refuse to pay its optional coverage because the “risk of loss” is increased. This situation often arises when an operator in the household is not listed on the coverage selection page but is a new driver.
• The “regular use exclusion” also limits coverage. This confusing doctrine essentially means that if you have more than one vehicle in your household and you drive the vehilce with the lower insurance limits, you will be bound by that coverage even though other household vehicle(s) have higher insurance limits.

Obviously each state has its own laws and nuances. It is best to discuss these issues with someone who is informed in your state and can advise you accordingly.