Know your options on auto insurance

What you don't know about your automobile insurance can hurt you and your family in the event you are injured in a car accident. Below are some insights which you may not be aware of:

Tort threshold/limitation on lawsuit recovery

Believe it or not, there are times when attorneys have to turn down potential clients injured in a lawsuit solely based upon what they chose on their car insurance with regard to lawsuits. Most people are not even aware of the option and are given the default limitation on lawsuits. Under New Jersey law, if you have this limitation on lawsuits it means that you are barred from recovering money for pain and suffering unless your treating physician certifies under oath that you sustained a permanent injury. Permanent injuries include fractured bones, but often only if they are displaced, disfiguring scarring, and loss of limbs, but often people suffer other kinds of injuries (e.g. herniated discs in the spine) which are difficult to prove as permanent. If you do not want this limitation, be sure to let your insurance carrier know that you want the no limitation on lawsuit option. Be sure to ask how this affects your premiums; however, many times, you would be surprised at how little your premiums go up.

Uninsured/underinsured coverage

Another area of car insurance options that many people are not familiar with is their uninsured and underinsured coverage. There may be a time when you are injured in a car accident and the person who injured you does not have adequate insurance to cover your claim for personal injury. If that happens, you will be able to turn to your own insurance carrier to cover damages above the other driver's insurance limit; however, often people have opted for minimal underinsured coverage and therefore there is little room for help. Similarly, if you are injured in an accident caused by a driver who does not stop at the accident and is never identified, you can make an uninsured claim against your own insurance company. Again, however, an uninsured claim is limited by whatever limits you have elected on your auto policy. As such, it is suggested that one carry $250,000 in uninsured/underinsured coverage. Again, make sure you know how this affects your premiums.

Medical expenses coverage

Lastly, many drivers do not realize that if they have health insurance, they can designate their health insurance policy as their primary source of medical care should they be injured in an automobile accident. In other words, if you are injured in a car accident, your health insurer would pay first, and your auto insurer would provide only secondary coverage through Personal Injury Protection (PIP).

The reason this can be important is if you need significant treatment, you may want more flexibility in terms of what doctors or medical facilities you want performing that treatment. Some health insurance policies allow such flexibility; some don't --- of course, you need to like your health insurance options in order for this to make sense.

To the extent that you do not like your health insurance coverage, you should keep your PIP coverage; however, make sure you have adequate coverage. Most New Jersey drivers buy $250,000 worth of PIP, which is fairly safe especially if you have health insurance to act as secondary coverage. However, make sure you have that coverage particularly if you don't have health insurance; nothing could be worse than finding out after you've been hurt in a car accident that you can't afford medical treatment because you have elected lower PIP coverage simply to lower your premiums.

Final note, is that if you do elect Health Insurance as your primary coverage, you may save on premiums. But, make sure you confirm that your health coverage provider covers injuries from automobile accidents. A health coverage provider may be an insurance company, an HMO or some other type of benefit plan provided by an employer.