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Like many people, I check every day for updates in world events and other news. I was surprised to see yesterday that one of my favorite actors, Morgan Freeman, was apparently seriously injured in a car accident last night. Morgan Freeman has starred in some of my favorite movies including Glory, Shawshank Redemption, and too many other great movies to remember off the top of my head. From news accounts, it sounds like he was awake and alert at the scene and even making a few jokes, which is of course a good sign that he’s going to be alright. Regardless, our thoughts and prayers go out to him and his family and we all hope for a speedy recovery.

However, reading the story reminded me that auto accidents can happen to anyone, even a movie star. Even when we take precautions, drive safely, and wear seat belts, we cannot prevent someone else from driving recklessly or not paying attention to the road. There was even an Editorial in this morning’s paper that Bloomington, Indiana has an unusually high rate of aggressive drivers. That is why it is important to take some time to and educate ourselves on appropriate levels of insurance coverage and how insurance policies work.

Monroe County’s rate of aggressive-driving collisions is almost three times the state average. According to the report, the primary behaviors exhibited in aggressive driving include failure to yield the right of way, disregarding a signal or sign, improper lane usage, improper turning, following too closely, unsafe speed and improper passing.

First, it is important to make sure that you have a good insurance company. It’s difficult to sometimes know what is a good insurance company. There was a recent study done by the American Association for Justice which listed the Ten Worst Insurance Companies. I blogged about that topic a couple weeks ago. Suffice it to say, it would be a safe bet to stay away from those companies.

Once you have identified a good insurance company (and don’t make that decision just on pricing), make sure that your policy includes such things as “medical payments coverage” and “Uninsured/Underinsured motorist coverage” in addition to liability and property damage coverage. Medical payments coverage, or “medpay,” is insurance that covers your medical bills, regardless of whether or not you were at fault for the accident. Even if you already have health insurance, medpay can be used to cover your deductibles and co-pays. That way, you don’t necessarily have to be out-of-pocket for medical bills from an accident.

Uninsured/underinsured motorist coverage is insurance that protects you in the event that the person who caused the accident did not have any insurance, or just had minimum limits which are not enough to cover all the damages you sustained. Even though most states require that drivers have proof of insurance before they can renew the driver’s license or license plates for their vehicle, it is not uncommon for people to be uninsured. It is actually easy (unfortunately) for people to get around the requirement because High Risk carriers (insurance companies that insure people with multiple accidents, tickets, DUI’s), usually charge their premiums on a monthly basis. Therefore, many uninsured people buy one or two months worth of insurance coverage, receive the “proof of insurance” form in the mail, take it to the license branch to renew their license, and then simply stop paying the premiums the following month. By making sure you have uninsured/underinsured motorist coverage on your policy, you can protect yourself in case someone else doesn’t have any coverage.

Sometimes people ask me “how much is enough?” I generally recommend that people have at least $100,000 in liability coverage, $100,000 in Uninsured/Underinsured, and $5,000 in medpay coverage. If you can afford more coverage, then you should buy more. It’s usually not as expensive as people think, and you can usually receive a discount if you insure your house and your vehicles with the same company. Also, I would encourage people to look into buying an “Umbrella” policy. This is extra coverage that provides liability coverage and (usually) uninsured/underinsured coverage on both your house and your vehicles, and is generally sold in increments of $1 million in protection. My experience has been that umbrella policies are relatively inexpensive, especially for the amount of coverage they provide.

So, remember, accidents can happent to anyone, even movie stars, especially with so many agressive or reckless drivers out there. We can do our best to drive safely, but we still need to make sure we plan for the unexpected. Do yourself a favor. Take a minute to look over your insurance coverages. If you have questions, call your insurance agent and ask what the policy means. Its a very simple, but very important way to protect you and your family.

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