6 Common Auto Insurance Terms You Must Know

Did you know one in seven Colorado drivers are uninsured? With approximately 13% of motorists on I-25, C470, Santa Fe and your community roads driving around without insurance, you have to ask yourself if you are prepared.

Being prepared on the road means having auto insurance and additionally, knowing what’s in your plan. Here are six common auto insurance terms you need to know:

Adjuster: A person who investigates and settles insurance claims. In other words, the “individual employed by an insurance company to settle claims brought by policyholders or claimants. The adjuster evaluates each claim and then makes payment based on the coverage available in its policy contract,” says insurance.com.

The insurance adjuster is often one of the first people who will contact you after an auto accident. If this happens, remember to contact your attorney before making any statements, releasing medical records or any other information.

Bodily Injury Liability: “This kind of coverage protects you if you cause an accident that injures or kills someone. It does that by funding your legal defense and covering judgments against you if you’re sued. It also can pay for the lost wages or medical expenses of anyone you injure in a crash. Just remember that value of your policy determines how much Bodily Injury Liability coverage protects you in these cases,” says Quote Wizard by Lending Tree.

Full Coverage Car Insurance: “A policy that includes liability insurance plus collision and comprehensive coverage. It does not (repeat, does not) mean you’re covered against any and all events,” says NerdWallet.

Liability Insurance: “Coverage for sums that an insured becomes legally obligated to pay because of bodily injuries or property damage, or financial losses caused to other people,” says insurance.com.

Medical Payments Coverage (MP or Med Pay): “This coverage (usually optional) pays the doctor, hospital bills, and funeral expenses for injuries to you and the passengers in your car, regardless of who causes the accident, up to the policy limits. Med Pay is sold in states with traditional tort insurance laws. In states where Med Pay is optional, drivers may choose to rely on their own and their passengers’ own health insurance to cover resulting injuries. Most insurance companies offer a wide range of coverage amounts,” according to the Rocky Mountain Insurance Information Association.

In Colorado, this type of coverage must be offered by insurance companies but can be waived by drivers. If Med Pay coverage was waived by the driver, insurance companies must provide proof of declined coverage to the attorney.

While it may be tempting to waive MP coverage, don’t do it. Saving a few bucks here and there won’t be worth it if you’re in an accident and end up with thousands of dollars in medical bills.

Uninsured /Underinsured Motorist Protection: “If you’re hit by a driver who lacks car insurance or has insufficient insurance, your coverage for uninsured/underinsured motorist bodily injury (or UMBI/UIMBI) pays for treatment of your injuries and those of your passengers, while coverage for uninsured/underinsured motorist property damage (or UMPD/UIMPD) pays to repair your car,” says NerdWallet.

This auto insurance coverage is similar to Med Pay. It is not required in Colorado and many people opt out of it. Statistically, you may be fine without it but is that a risk you’re willing to take?

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Next time you’re looking at your insurance plan or cruising on those Colorado roads, remember these important coverage tips. We wish everyone would drive safely out there but the reality is that it doesn’t always turn out that way. If you have been involved in an accident, contact DCC Law today and we will help you work through these insurance terms and more.

The team at DCC Law knows what it takes to take care of people. Call us today and let us take care of you.

March 01, 2019