Know Your Policy
Most of us search for low rates when shopping for insurance. Many insurance companies have very cute TV ads telling us how much we can save. However, most won’t know the true cost of their “money-saving” insurance, until they are involved in an auto accident. It is incredibly important to know and understand your automobile insurance policies.
Minnesota is a No-Fault state. What does that mean?
It means that you have coverage from your own automobile insurance company – called No-Fault benefits – whether the accident is your fault or not. These benefits include Personal Injury Protection (PIP) for payment of medical bills, wage loss coverage, mileage reimbursements, and replacement services (if, say, you can’t clean your home because of your injuries). This is coverage that does not have to be paid back to your insurance company if you make a claim against someone else who caused the accident. Standard Minnesota policies are usually written with $20,000 in medical coverage (which includes medical mileage reimbursements and replacement services) and $20,000 in wage loss coverage (which is paid at 85% of your gross wage up to a maximum of $250 per week). You can request higher limits for very low cost.
What if the other driver isn’t insured or has very low policy limits?
That’s what UM (Uninsured Motorist) and UIM (Underinsured Motorist) coverage is for. If another driver was at fault for the accident, and they don’t have sufficient insurance coverage to pay for your permanent injuries, your own UM or UIM benefits will kick in and make up the difference, up to your policy limits. It is important to ask your insurance agent to explain your coverage and how much it costs, based on the amount of the deductible. By raising your deductible from $500 to $1000, you can likely double your policy limits for the same cost you are paying for your policy now. Your deductible only comes into play when the accident is your fault, so this simple change can be very beneficial to you if you are a safe driver. Don’t be shy about comparing your policy limits and cost with other companies.
What about property damage and car rental after an accident?
If you’re involved in an accident that was not your fault, and the at-fault driver has automobile insurance, that driver’s insurance will pay for repair or replacement of your vehicle, and you will not pay your deductible. That driver’s policy will also provide you with a rental car while your car is not drivable. If you are at fault in the accident, you will be charged your deductible and no rental car will be made available to you unless you have paid for that coverage.
At Burke & Thomas, we know insurance – and we’re happy to pass that knowledge along. Give us a call and we’ll go through your insurance deck sheet with you, free of charge.
Call our office at 651-490-1808 or 800-985-7273 or contact us to schedule a time to talk with John Burke. Language services are available.
