LITTLE KNOWN FACTS ABOUT AUTO INSURANCE

By: Greg A. Muir

In handling numerous personal injury matters involving automobile accidents, our experience at Young Wooldridge has shown that many individuals who own or operate motor vehicles are surprisingly unaware of the basic insurance coverage issues that may significantly affect their ability to recover damages in an automobile accident.

Current California law requires that all owners and/or operators of motor vehicles carry liability insurance coverage. The Department of Motor Vehicles may impose penalties for the failure to do so. In addition, with the passage of Prop. 213 in 1996, injured drivers who do not have their own liability insurance will have serious limits placed on injury claims, even if the accident was caused by the negligence of another person.

Prop. 213, as enacted, reduces the damage claims of (uninsured) injured operators of motor vehicles to medical expenses and loss of earnings. No recovery is allowed for physical pain and suffering, nor for the impact of such injuries on life activities. Thus, the lack of liability insurance may have drastic consequences, particularly in a catastrophic type of accident.

Another automobile insurance coverage problem commonly seen is the failure of drivers to protect themselves with adequate limits of uninsured motorist (U.M.) coverage. Many clients wrongly conclude that, given the current requirement of liability insurance, the need for U.M. coverage has become unnecessary; however, it is still a sad reality that many uninsured drivers remain on the highways. Even more importantly, many insureds do not realize that U.M. coverage also acts as underinsurance for up to the limits of the U.M. coverage purchased. Thus, U.M. coverage can provide an excellent means of coverage protection for injuries caused by other negligent drivers who have only minimal insurance. In addition, the cost of adequate U.M. coverage (we recommend at least $100,000 U.M. coverage) is a relatively inexpensive portion of your insurance premium.

We strongly encourage our clients to review their automobile insurance to ensure appropriate protection in the case they are injured by the negligent acts of others.