Good advice from readers on INSURANCE

In my newsletter last week I related the story of some friends who had a house fire recently.

I used the opportunity to encourage my readers to check their insurance coverages. You can see the issue at:

http://www.aweber.com/b/1tqIh

Two readers were nice enough to pass on some more important advice...

I just read your newsletter and the mention of checking your insurance. Thank you for sharing this with your subscribers. 90+% of the American public does not understand their insurance - any way that we can help educate them is a plus. You mentioned you had raised your auto insurance Bodily Injury Liability/Property Damage (known as BI/PD) from 25/50/25 to 100/300/100, and your premium only went up $35.

You might also check with your insurance co. to see what 250/500/100 costs...probably only a couple dollars more. These coverages help protect your assets, against catastrophic losses, if you are at fault in an accident and injure other people or their property.

Here is another thing that you may want to share with your subscribers. There is another coverage that most people overlook or carry lower limits than they have on their BI/PD- that is Uninsured Motorist/Underinsured MotoristCoverage (commonly referred to as UM/UIM).

Many companies set this coverage at the state mimimuns, the lowest available limits allowed by the State Dept. of Insurance, because people don't understand this coverage. Whereas BI/PD applies to other people's injuries or property, UM/UIM covers you.

If you are hit by an uninsured or underinsured driver, UM/UIM covers your injuries, medical expenses, rehabilitation, lost wages....up to your UM/UIM limits. So these should always be at the same limits as your BI/PD....it doesn't make sense to carry more insurance to protect others and less to protect yourself.

Some states have as high as 28% of drivers driving uninsured, and that is expected to increase, due to the current state of the economy, unemployments, etc. In most states, government vehicles do not carry liability insurance. Increasing this coverage usually costs much less than the $35 you paid to raise your BI/PD.

This is a rather simplistic explanation, but I tried to keep it simple to help others to understand. I work in the Auto Insurance industry - for a company in the Top 3 Auto Insurance companies, and we have a fiduciary responsibility to our customers and policyholders to educate them and protect them to the best of our ability.

Sincerely,
Sheri
Scottsdale, AZ.

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And from a fellow NYer talking about the Uninsured Motorist issue with a personal perspective....

Good lesson regarding the insurance. Another reason folks may be
interested to look into this is because of the "underinsurance" factor.
Many do not realize that if you're injured in an accident, NYS law dictates
that you are only entitled to however much the other party is insured
for... which may be very little...

Case in point - my husband and I were in a motorcycle accident in June
2000. I was permanently injured. The person who hit us was insured for
only $100,000 (thankfully more than the $25K NYS minimum).

Thankfully, because it was clearly his fault, my lawyer was able to easily get the
maximum. But... because of that little-known law, that's all I could sue
for. After my lawyer took his cut (1/3), I was left with $69,000 to try
and cover 7 months out of work, then back to work part-time for 3 months
before I could return to my full-time status.

Plus... a lifetime of medical bills because my hip was shattered and my back was broken in three
places (among other fractures, but these are the ones that still haunt me).
I see a specialist three times a year to check my hip - because it will
need to be replaced at some point - and the $69k is LONG gone.

OK, so this isn't a pity party. All this to say - Had I known before what
I know now, we would have had that extra coverage and underinsurance and
then our insurance would have picked up the difference between the other
guy's $100k and whatever amount we chose (which, by the way, is $300k now -
same as yours)... and things would have been that much easier for a bit
longer with that extra cash.

So that minimal increase to your insurance
premium is WELL worth it if you were to (God forbid) be injured and need to
rely on your own insurance to pick up some of the tab for your medical
care.

Just a thought... and a story to share if you so choose.

Cheers,
Marsha.

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Thank you Sheri and Marsha.