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Protect Yourself: Personal Injury Protection and Uninsured Motorist Coverage

Two of the most important coverages you can buy when you are buying your auto insurance are Personal Injury Protection and Uninsured/Underinsured motorist coverage. These coverages help protect your family when you're in a wreck.

These coverages are so important that Texas law includes it in your auto insurance unless you specifically reject it in writing when you're buying your insurance.

What Is Personal Injury Protection Insurance?

Personal injury protection (or PIP) insurance is an option that you can purchase when you buy your own automobile insurance. PIP pays for your medical expenses and your lost wages when you’re in a car accident or wreck.

You can buy almost any amount of personal injury protection coverage. If you buy it, then you have at least $2,500.00 of insurance. That's the minimum required by law. Other common amounts are $5,000.00 or $10,000.00 of coverage. The most I recall seeing is a former client who was a lawyer who had $100,000.00 of coverage.

PIP has two important features. First, there is no subrogation interest; unlike health insurance, if you submit bills to your PIP carrier, you do not have to reimburse the PIP carrier for amounts paid when you receive a verdict or settlement that includes the same bills. And second, you can submit bills to your PIP carrier even if the bills have been paid by your health insurance. Because of this, generally, all money recovered on a PIP claim goes straight to you (we do not charge to assist clients with making PIP claims, though some attorneys do).

If you have been in litigation involving a car wreck or accident, you know that there are many expenses, including attorneys’ fees and case expenses, that you never have the opportunity to recover. Because PIP can help "offset" these items, and because PIP is also fairly inexpensive, it’s a good way to protect you and your loved ones from many of the losses that come with being victims in a car wreck.

Why Is Personal Injury Protection Insurance Important?

One of our recent cases demonstrates the importance of buying insurance to protect yourself. Dick and Jane were both passengers in a vehicle that was hit when the other driver made an improper turn. We represented both Dick and Jane in the wreck, and we settled their claims for what we thought were decent amounts. From the settlements, both Dick and Jane were to receive roughly the same amount. But Dick’s purchase of significant amounts of personal injury protection insurance made all the difference in the world.

In our case, Jane had purchased PIP in the minimum amount offered by insurance companies. On the other hand, Dick had purchased the coverage in a very high amount. As a result, after it was all said and done, Dick will take home thousands more in cash than Jane even though their medical expenses and lost time at work were similar.

What Is Uninsured/Undersinsured Motorist Coverage?

In addition to PIP, uninsured and underinsured (UIM) coverage can also be purchased through your auto insurance to protect you in case the person that hits you doesn’t have insurance or doesn’t have enough insurance. At a time when the state regulatory authorities estimate that twenty percent of drivers don’t carry any automobile liability insurance - and a majority seem to have only the minimum limits ($30,000.00) - it’s critical that potential victims protect themselves by purchasing UIM coverage.

Like PIP, you have to pick how much UM/UIM coverage you are going to buy. If you buy it, the minimum that you can currently buy is $30,000.00 of insurance. That's the most common amount, but we also frequently see clients with $50,000.00, $100,000.00 and even $250,000.00 of coverage.

So how does it work?

If the other driver doesn't have any insurance, then we figure out the value of your claim, and instead of making a claim against the other driver, we just make it against your policy. If you purchased $30,000.00 of uninsured motorist insurance, and your claim is worth $20,000.00, then your insurance company will pay you the $20,000.00.

You typically can't recover more than the policy limits. For example, imagine a case where the other driver doesn't have insurance, you bought $30,000.00 of uninsured motorist coverage, and your claim is worth $50,000.00. In that situation, you don't get compensated for the full $50,000.00. Instead, the insurance company only has to pay the $30,000.00 of coverage.

If the other driver has insurance, but not enough to compensate you for your injuries, then you make claims on both policies. But, your uninsured motorist coverage carrier gets a credit for any amounts paid by the other driver's insurance. For example, imagine a situation where the other driver has $30,000.00 of coverage, you have $30,000.00 of uninsured motorist coverage, and your claim is worth $50,000.00.  In that situation, the other driver's insurance will pay their $30,000.00 of coverage. Your underinsured motorist insurance will then pay you $20,000.00 (the $50,000.00 value of the claim minus the $30,000.00 paid by the other driver's insurance).

Why Is Uninsured/Underinsured Motorist Coverage Important?

As I noted above, a large percentage of Texas drivers are uninsured and most of the drivers who have insurance have only the $30,000.00 minimum policy.

I routinely have to tell clients that I can't help them recover the compensation they are due and that their families often need to help go forward because there isn't enough insurance available. Buying enough UM/UIM insurance can help make sure that you and your family aren't in that situation.

Holding Wrongdoers Accountable

Learn more about car insurance in Texas and what you can do to avoid common accident claim mistakes with these free resources.

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