06 michael jin ipHlSSaC3vk unsplashSo many times, I have heard people who have been involved in an auto wreck say: “I have full coverage.” What does that mean? For most people that means they have coverage for liability, property damage and a rental car. Let’s talk about what that often does not mean.

When most of us buy auto insurance, we’re just looking at how much coverage we need to get behind the wheel and how low we can keep the monthly payment. Here’s the reality of auto insurance coverage:

One day you are running out to the grocery store to pick up a few things. As you drive through an intersection with the green light, another driver runs the red light and smashes into your car. You wake up at the hospital with stitches in your head and several broken bones. You had to have some emergency surgery, and you will be in the hospital for several days. You aren’t going to be able to go back to work for quite a while and you have bills to pay. Your life has just been turned upside down. Your daily commitments and responsibilities are still there, even though you are out of commission.

It’s usually at this point when most of us will begin to wonder about how much insurance the guy/gal that hit us had. This is a good question because your medical bills alone could easily exceed $30,000. What about your missed paychecks? What about the broken bones and the scar on your head? What about the terrible pain you feel that the pain killers barely take the edge off?

North Carolina law requires a minimum of $30,000 in insurance coverage to operate a motor vehicle. If the guy that hit you has minimum coverage, what do you do? You look at your insurance coverage. Do you have “underinsured” coverage? That is the “UIM” coverage on your policy. “UM” is for when an uninsured motorist hits you. “UIM” is for when a motorist hits you and they do not have enough coverage to pay for your damages. Most of us do not know much about “UIM” or “UM” until we need it, and then we wish we had it or had gotten more.

Honestly, if you have a significant injury in a car wreck, $30,000 minimum coverage will not be enough to protect you from serious financial loss. On the flip side, if you run the red light and hit someone and only have $30,000 in coverage, that will not protect you from serious financial trouble, either. My recommendation is to get as much coverage as you can afford and, if you can, try not to have anything less than $100,000.00 in coverage. This should include liability coverage (if you are at fault) and underinsured “UIM” and uninsured “UM” coverage (if someone hits you who has little or no coverage). If you can afford more, do it. It only takes one bad wreck to make us realize how important that coverage is — and if you don’t have it, the consequences can be devastating.

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