In these tough economic times, we're struggling to make ends meet. I know we have to have car insurance, but is there anything we can do to reduce the cost?
Uninsured motorist coverage (Second in a series.)
In our last column, we talked about liability insurance which protects you from claims made by others who contend you're responsible for damaging their property or injuring them. In this column we're going to discuss another required coverage, uninsured motorist coverage.
Suppose you're driving to work and your car is rear-ended. Your car is damaged and you and your passenger are injured. What happens when you find out the car that rear-ended yours is uninsured? Despite mandatory insurance laws, this may be more likely than you might think. The Insurance Information Institute estimates one in seven drivers is uninsured. Oregon law requires this coverage to pay for damages you are legally entitled to recover from the responsible party.
There are two types of coverage available. Coverage for injuries is mandatory, and you must carry at least the minimum limits required for liability coverage, $25,000 per person, and $50,000 per accident. If you choose higher limits for liability coverage, your uninsured motorist limits will be the same unless you advise your insurance company in writing that you want to carry lower limits. You may also elect uninsured motorist coverage property coverage for damage to your car, but that is an optional coverage.
Sometimes you and your insurance company may not agree on the amount of damages. If that happens, you and your insurance company may go through a process called arbitration. Generally, this means your representative, a representative of the insurance company, and a mutually agreed upon umpire will review the evidence and determine how much will be paid.
Like liability insurance, uninsured motorist coverage may not be the best place to save money. If you're injured in a serious accident, you may not have other resources to cope with the consequences. Uninsured motorist coverage also applies if you selected higher limits than the limits available from the responsible party's insurance company. We again recommend carefully evaluating your personal situation and buying adequate limits to protect you and your family.
If you experience difficulties with your insurance company or agent, our advocacy team is available to assist at 1-888-877-4894. We cannot determine responsibility or how much a company should pay for an uninsured motorist claim, and we cannot provide legal advice. However, we can make sure the insurance company is in compliance with Oregon law and the terms of the policy.
Next time we'll cover personal injury protection coverage.