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5 Things You Need to Know about Insurance

Posted at 2:54 PM, Nov 01, 2018
and last updated 2018-11-01 16:54:16-04

Auto insurance can often be confusing. Most people do not really understand what their automobile insurance policy covers, or even why they need good insurance coverage.

Attorney Craig Swapp of Craig Swapp Associates stopped by with 5 things you need to know about insurance.

1 - Why do I need auto insurance?
You should have sufficient liability coverage to protect the general public from any damage or injuries that you may cause. That`s why you buy insurance and Utah state mandates valid and current insurance as a condition to have a registered vehicle.
Because you cannot predict the severity of a future accident, you should have enough liability coverage to adequately protect you from the liability you may incur by causing a severe accident.

2 - How much insurance do I need?
State Requirements & Recommended Coverage
While the minimum liability auto insurance required by the state of Utah is $25,000 per person/$65,000 per accident, we strongly recommend limits of at least $100,000 per person/$300,000 per accident (commonly known as 100/300 coverage). This means that in the case that you cause an accident you are covered by your insurance policy up to $100,000 per person involved with at $300,000 limit total for the accident. While many people are tempted to try and save money by only having the state minimum, the last thing you want as a driver is to cause an accident, not have enough insurance to cover the costs, and ultimately be held responsible for thousands of dollars in medical bills and damages. No one can predict the severity of a future accident.
Even though we recommend a minimum of $100K/$300K coverage, with inflation we recommend looking at even higher limits - it is not that more expensive.

3 - What is uninsured motorist coverage?
While it is a Utah law that drivers must have auto insurance, there are studies that show as many as 1/3 of all drivers are uninsured. If you`re involved in an accident with a driver that is uninsured, there isn`t an at-fault auto insurance company to hold liable for the accident. That`s where uninsured motorist (UM) coverage kicks in from your own auto insurance policy. UM coverage keeps you and your family covered even if you`re in an accident that`s caused by an uninsured driver.

4 - What about underinsured motorist coverage?
Another common issue occurs when you`re the victim of an accident and the at-fault driver doesn't have enough insurance to cover all of the medical bills of you or your passengers. You`re going to want to have underinsured motorist (UIM) coverage for these situations. UIM coverage will kick in from your own insurance policy to cover medical bills and damages after all the money from the at-fault driver`s policy is exhausted. Many drivers in Utah are driving around with the state minimum (25/65), which just isn`t enough for major accidents. Having that UIM coverage on your policy protects you and your passengers from underinsured drivers.

5 - What is Personal Injury Protection (PIP)?
Many states, including Utah, also require Personal Injury Protection (PIP), or what some call 'No Fault Insurance.' PIP means that if you have auto insurance and are in an accident, regardless of who was at fault, your own auto insurance will pay up to $3,000 to cover any medical treatment associated with your accident. This is a great protection for Utah drivers. The $3,000 can be applied to an ambulance ride, a surgery, chiropractic treatment, visits to a specialist, etc.

6- What are the possible consequences if I cancel or let my insurance lapse?
If you are in an accident without auto insurance or with a lapsed policy you are open to a lot of unfortunate consequences if you are in an accident. You no longer have the right to PIP, meaning that any and all of your own medical bills may have to be paid out of your own pocket. Without valid insurance, you will also be held financially responsible for the injuries and damages of other people if you cause an accident, which will make you vulnerable to serious legal consequences. Even if you're involved in a minor accident or if you`re pulled over for a traffic violation you will likely receive a costly citation for driving without valid insurance.
Some people argue that they don't need auto insurance or only need the very minimum coverage because they are 'great drivers' or they've 'never been in an accident'. The truth is that anyone can cause an accident and anyone can be the victim of an accident caused by someone else, especially as the weather gets colder and we see more dangerous conditions on the roads.
At Craig Swapp & Associates we encourage everyone to review their current insurance policy. If you don`t have at least 100/300 coverage or you don`t have UM, UIM, or gap coverages, please look into expanding your insurance. You won`t regret it and it may end up protecting you and your family.

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