Car Accidents and Insurance Claims: A Primer

If you are like most people, the words “insurance claim” make you a bit anxious. You have car insurance, and you know that, generally speaking, it’s supposed to help you if something happens to you or your car, but other than that – it’s all a bit of a blur.

We want to look at some of the most common questions we hear in regard to car insurance from our clients, and offer you some basic information about how insurance helps you when you are hurt in a car crash in Maryland.

What kind of car insurance do you need?

Most Maryland drivers have liability insurance, which covers expenses associated with property damage (property damage liability) or an injury (bodily injury liability). Maryland requires drivers to carry a certain amount of coverage for these. Bodily injury is $30,000 per person, and $60,000 per accidents, and the minimum coverage for property damage is $15,000. On average, people have significantly higher coverage rates than these ($100,000/$300,000 is the average for both, according to Allstate). The more coverage you purchase, the more expensive it is – and that is important, because not every driver who has a crash will be fully covered. (More on this in a bit.)

Maryland also offers a few other options:

• Uninsured motorist (UM), in case your accident is the fault of someone without insurance (same limits apply).
• Underinsured motorist (UIM), in case the other driver has insurance, but not enough to cover the costs of your medical expenses (grouped in with UM).
• Personal Injury Protection, or PIP, which will pay medical coverage and reimbursement of lost wages regardless of fault ($2,500 limit generally, but additional coverage can be purchased).
• Medpay coverage, an optional coverage plan that helps cover medical expenses (or funeral costs) for you or your passengers, in the event you are hurt in a crash.
• Collision, an optional coverage plan which covers the expenses for your damaged car.
• Comprehensive, an optional coverage plan that helps you cover the expenses if your car is stolen, or if a weather event (like a falling tree or high winds) damages or totals your car.

You are required, under Maryland law, to carry liability, UM and PIP, but the other options are up to you.

Why should you purchase additional auto insurance?

Additional insurance, again, means an additional out-of-pocket expense for you, and for some drivers, this is a hardship. This is what we meant when we said earlier that not every driver will have enough coverage in case of an accident.

For example: imagine that you are sitting at an intersection. The light turns green, you drive forward, and suddenly you are “t-boned” by a driver who blew through a red light. If that driver has the minimum insurance required by law, or is uninsured, you could be out of luck. You cannot collect more than the policy limits allow from the other driver’s insurance.

If, however, you have additional types of coverage, or have purchased a plan with higher coverage amounts, then you are protected in the event of a car crash.

How much insurance do you need?

It depends. Allstate says the average amount of coverage for drivers purchasing liability insurance in Maryland is $100,000/$300,000. The amount for UM/UIM is the same for bodily injury, though, on average, most people only carry about $15,000 for property damage. According to Becker’s Hospital Review, in 2014 (the most recent year available), the average cost of one day in a hospital in Maryland was between $1,024 per day (in for-profit hospitals) and $2,512 per day (in nonprofit hospitals). These numbers are only for an overnight stay; they do not include your medication expenses, your lost time at work, any additional tests that might need to be run because of circumstances particular to your crash, the cost of daycare for your children, additional therapies or rehabilitation, and so forth. You should review your policy regularly, enquire the cost of increasing your coverage, and purchase as much as you can reasonably afford. Based on the cost of healthcare in today’s world, we recommend purchasing at least $300,000 in coverage, or more if that is economically feasible.

The Centers for Disease Control and Prevention reported in 2013 that fatal car crashes cost Maryland $690 million: $6 million in medical costs, and $684 million in work loss costs. While there is no set amount of additional insurance that you “need” buy, you should remember that a serious car accident can lead to long-term, even permanent injuries. The costs of healing may fall on your own shoulders if you are hit by someone who doesn’t have enough insurance, and you could face a battle to recover what is rightfully yours in the insurance company doesn’t want to play ball.

If you are hurt in a car accident, the Baltimore injury attorneys of Plaxen Adler Muncy, P.A. want to help. For more than 35 years, we have helped protect the rights of injury victims throughout Maryland. To learn more about our services, or to speak with an experienced lawyer about your case, please call 410-730-7737, or fill out this contact form.