When you are in a car wreck, there are many potential types of coverage, to compensate you for the damages caused in the crash. If the person that hit you, or caused the wreck, has coverage, it would be liability coverage that you would claim against. If the person that hit you or caused your car crash does not have coverage, then you would make a claim on your own policy, for your first party coverage, assuming you have first party coverage on your policy. When you purchased your automobile coverage, in most states, your agent was required to present you with the option of first party coverage, including uninsured motorist coverage, underinsured motorist coverage, personal injury protection, and medical payments coverage.
a. Uninsured Motorist Coverage
This coverage pays for both bodily injury and property damage. This coverage is available when you have an accident with another driver, who is found to be at fault, and also has no liability coverage. This coverage also covers in hit and run accidents. UMBI pays for the bodily injury and UMPD pays for the property damage.
b. Underinsured Motorist Coverage
This coverage is similar to uninsured motorist coverage, except that it covers accidents, where the at fault driver does not have enough coverage. Accidents can cause damages that are higher than the value of the liability policy and in that situation, underinsured coverage would apply.
c. Personal Injury Protection Coverage
This coverage pays for damages to your body and damages to the bodies of your passengers, including medical expenses and 80% of lost wages. This would also cover you if you were in an accident in someone else’s vehicle, on your bicycle, on your motorcycle, or if you were hit while walking (a pedestrian).
d. Medical Payments Coverage
This coverage pays for medical expenses due to damages to your body and damages to the bodies of your passengers. This would also cover you if you were in an accident in someone else’s vehicle, on your bicycle, on your motorcycle, or if you were hit while walking (a pedestrian). The main difference between personal injury protection and medical payments coverage is that medical payments may be subrogatable, meaning that, if it is written in your policy and you receive payment from a third party, for the same damages that the medical payments carrier paid you for, the medical payments carrier can require repayment, from you or the other carrier (liability carrier).
2. Can I get just first party coverage?
This greatly depends on the state that you live in and what laws have been enacted in that state. In Texas, you are required by law, to have a liability policy, at minimum. If you choose to purchase additional coverage, you can add on both personal injury protection or medical payments coverage and uninsured/underinsured motorist coverage. You can also choose to add one of the three, but you cannot purchase only first party coverage. In Oklahoma, you are also required, by law, to have a liability policy, at a minimum. As in Texas, in Oklahoma, you can add on the additional first party coverage, but you cannot purchase only first party coverage. Some states have what is called “no fault” auto insurance laws, where the driver is required to purchase personal injury protection, as part of their policy. In true “not fault” states, there is also a restriction on the right to sue. According to the article, “Background on: No-fault auto insurance” (https://www.iii.org/article/background-on-no-fault-auto-insurance), “Twelve states and Puerto Rico have no-fault auto insurance laws.” There are variations of application of the at-fault laws, but the states that do have some variation of this law are Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, Utah, New Jersey, and Pennsylvania. This is something to be aware of, not only if you might live in one of these states, but also, if you might be traveling through one of them.
3. Can I get higher first party limits than liability limits?
This also depends on the state that you live in and what laws have been enacted in that state. In both Texas and Oklahoma, you cannot purchase first party coverage with higher limits than your liability coverage. If you want to increase your uninsured/underinsured limits, you must also increase your liability limits. Texas minimum liability limits are $30,000.00 per individual and $60,000.00 per accident. Oklahoma minimum liability limits are $25,000.00 per individual and $50,000.00 per accident. Regarding personal injury protection and medical payments coverage, in both Texas and Oklahoma, you can purchase higher limits on these types of coverage, without purchasing any more than the minimum, on liability coverage. In states where there is no-fault coverage, then there is the possibility that you would not purchase any liability coverage, so of course, your first party limits would be higher.
According to the most recent estimates, approximately 14% of Texas drivers are uninsured. That means that means that, on average, out of every 50 cars that pass you, on the road, 7 of them are not covered with liability insurance. Approximately 10% of Oklahoma drivers are uninsured. That means that means that, on average, out of every 10 cars that pass you, on the road, 1 of them is not covered with liability insurance. The national rate of uninsured drivers is around 13%. Another hidden statistic to be aware of is liability policies with exclusions, that can make a driver uninsured. Some policies are issued excluding coverage to all males under 25 years old, so that if a male, under 25 years old, drives the vehicle, even though there is liability coverage, he is not covered, because he was excluded. Another common exclusion is specifically excluded drivers, even if they life in the same household as the insured. These exclusions make coverage cheaper, but protection for society, more costly.
5. What is best for me and my family, regarding first party coverage?
If at all possible, you will want to get first party coverage for you and your family. Not only does this coverage protect you, your family, and your vehicle, against the many uninsured drivers out there, it also protects you and your family against instances where drivers are specifically excluded or excluded because of the way the policy was drafted. There can also be instances where permissive use comes into question. That means that, even if the driver was not listed on the policy, the insured can give them permission to drive and they are covered, through permission. This sounds like a good thing, until the insurance company tells you that the driver that hit you, not only was not on the policy, but they also did not have permission to drive the vehicle, making them an uninsured driver. One last benefit of first party coverage, when it comes to your vehicle, in most policies, the uninsured motorist property damage deductible is typically lower than the collision deductible. Again, if you can, the safest route, is to have first party coverage to protect you, your family, and your vehicle.
Stay Safe Drivers!