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Why You Need Insurance



Everybody hates paying for insurance. Most people think it is a waste of money, until they need it. Unfortunately, far too many people do not have enough insurance (or none at all), and they do not find this out until it is too late.


Now, I am no fan of the insurance companies, but insurance itself is a necessary evil in modern society. Almost as important as having insurance, is making sure you have enough.


Obviously, more in most things is better, but there is a balancing act in this instance because more insurance means a higher premium. That said, often times having significantly more insurance is not as expensive as you think. Sitting down with an insurance agent can help you figure out where you might be able to save, but also explain what all of the available coverages can do for you.


But I'm an Excellent Driver


One common refrain is that people often think that since they are a good driver, then they do not need much auto insurance. However, what they do not realize is that often times your own insurance comes into play even when you did not cause the accident. That is, even if you are the most carefullest driver in the world and never cause an accident, you better hope you are never seriously injured by the 18-year-old who is carrying the state minimum of $25,000 in bodily injury coverage (Oregon). The state minimum would not cover much in the way of any surgeries you may need, nor cover your month of lost income.


Now, yes, you could sue the 18-year-old for more than the $25,000, but good luck collecting from them when they make minimum wage. Plus, if you do get a judgment, they could fairly easily file for bankruptcy and wipe the debt out (not always available).


Where Your Own Insurance Comes Into Play


So what happens instead, is that you look to your own insurance for your underinsured coverage. This is where making sure you have adequate limits on your own policy is key. A good number is $100,000, and adding an umbrella policy is also a good option, which can be fairly inexpensive given the amount of coverage they can provide. The underinsurance is also uninsured motorist insurance as well, meaning if you get hit by someone with no insurance (as well as if you get hit by a hit & run driver), you will still have coverage.


Similarly, your policy also has personal injury protection (PIP), in which your own auto insurance will pay for your medical bills. You see, the other insurance company will not pay your medical bills until down the line when there is a settlement, so PIP makes sure you can get treatment now. The problem with PIP, is the state minimum is $15,000 (Oregon), which is barely anything when it comes to healthcare. A couple days in the hospital will eat through that in no time. So, again, you can always opt for more. Now, your health insurance will pay for treatments as well, but one nice thing about PIP is you can choose whichever doctors you want, you are not limited to those in your network.


Another great feature of PIP is that it also covers you when you are a bicyclist or a pedestrian and are injured by an automobile. Further, it also covers your family members when they are a bicyclist or a pedestrian. For example, if your ten-year-old is riding their bicycle down the block and runs into a parked car, your PIP will pay for her medical bills.


When You Are At Fault


Then you have the issue of your own liability if you do cause the accident. If you only have the bare minimum insurance and you seriously injury someone, odds are the attorney for the victim will seriously look at going after your assets. If you own a home and have some equity, you could lose your house. But, if you have say $100,000 in coverage, they will be less likely to come after you.


Besides auto insurance, you also need to make sure you have enough homeowners’ or renters’ insurance. Both of those are liability insurance, and will often cover far more than just issues on your property (though avoid Allstate as they have special provisions to avoid paying on claims that many other insurers do cover). So, again, make sure you have enough coverage, especially if you have a dog.


Lastly, why does your attorney care? Because a lack of insurance comes up far too often in personal injury cases. A fairly straight forward rear-end accident can easily cause $75,000 in damages and more, and many people do not have enough insurance to cover it. Now, if you have a death, game over if you only have the state minimum.


Insurance protects you

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Insurance is your safety net
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