Reviewing our auto policy which has been liability only for a long time. I took the mustachian stance of having enough money for a replacement car if needed and not paying extra for full coverage. Then I started imagining a serious crash and wondered how medical expenses would pan out.
My liability only covers 20k, does anyone know if that is adequate for most crashes? We have excellent health insurance through my work and it is unclear how those two work together in the instance me or my family is seriously injured. Fear and uncertainty is pushing me towards comprehensive but that is not a fact driven decision and I'm wondering what the mustachian minded folks have to say.
As always, I value your input,
Onemorebike
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*floats around like a spooky ghost*
I was summoned!
Okay, I deal with this every day (personal injury attorney). But also keep in mind that insurance laws are state specific, and there's a surprising amount of variance. Still, I think a few central concepts cut across all statutory differences.
1) Protecting your assets/finances if YOU negligently cause a wreck and injure people (this includes your passengers) while you're driving. Answer: Get a TON of liability coverage, for both bodily injury (you hurt them) and property damage (you destroyed their car/property). THIS IS VITAL. Personally, I have $300K in liability coverage, as an example. If you kill someone, that's enough money for your insurance company to fight and demand a release from the other side in return for settling, which means you'd be protected. You can also explore umbrella policies, which kick in at certain levels after your liability coverage is exhausted.
2) Protecting your body/earning power if SOMEONE ELSE negligently causes a wreck and injures you.Answer A: Make sure you have UM and UIM coverages. THIS IS VITAL. This is coverage you buy that essentially acts like there is liability coverage (in the case the person who hit you was uninsured) or like there is extra liability insurance (in the case the person who hit you was underinsured, meaning they had -some- coverage but not nearly enough to compensate you for your injuries).
Answer B: In addition, I suggest that you have med pay/PIP/no-fault coverage to handle at least the first round of accident-related bills (and in the case of no-fault, PIP, some of your lost wages). Your health insurance will kick in afterwards. But this is a smaller deal compared to Answer A.
3) Worrying about medical costs either wayAnswer: You can rack up a TON of medical bills obviously whether it's your fault or someone else's. PIP/no-fault/med pay is not designed to protect you from catastrophic losses, just relatively small amounts (think $10K or so).
If you caused the accident, then there's no way for you to recover on a lawsuit, so your health insurance just covers everything like normal, and you have to deal with deductibles and co-pays like normal. If you are in the US, PLEASE have the best health insurance no matter what MMM says. The chance of you being in a bad car accident is a legitimate concern for most all of us!
If you didn't cause the accident, then you
might be able to get the at-fault driver's insurance company to reimburse you for your medical expenses, but these cases drag out, and some drivers just don't have much liability coverage anyway, meaning you'd almost certainly have to get your bills paid first through health insurance, and then your health insurance would be paid back out of an eventual settlement. So still, having solid health insurance is vital.