Who pays for your damages in a car accident case, or other personal injury case? Most people know an insurance company is footing the bill. Our society has evolved in such a way as to require car insurance for almost everything we do. The number one way that will affect you is with car insurance. Although this post will discuss car accident cases, the same principles are true for any type of personal injury case.
Technically, when a car accident occurs, the negligent driver is on the hook to pay for your damages. However, the actual payment almost always comes from an insurance company.
Maryland, like all states, requires everyone driving a car to have car insurance that covers them if they cause an accident. The insurance company must provide the other driver with a lawyer, and will pay for the damages caused in the accident according to the insurance policy. So your damages will almost always be covered by car insurance.
This is usually true even if the other driver had no car insurance at all, or too little insurance to cover your case – because you actually have insurance for that particular situation. This is called uninsured or underinsured motorist coverage (UM/UIM) and you will probably see it on your car insurance policy if you look. It also covers you for a hit and run driver, known as a phantom vehicle case.
In Maryland, the minimum amount of insurance required to drive a car is $30,000 per person, and $60,000 per accident no matter how many people are injured. This is called a 30/60 policy. That is NOT enough to cover you while driving on the road. In fact, it is ridiculously low.
In this day and age, with the cost of medical treatment what it is, that is not going to come close to covering you if you cause an accident resulting in even medium sized injuries, much less serious injuries.
You should be sure that YOU have enough car insurance coverage to protect yourself if you cause an accident. You should also be sure you have uninsured/underinsured motorist coverage for your own car in the same amount.
If the person causing your accident has no car insurance (uninsured) or too little car insurance (undersinsured) your own policy will make up the difference up to the maximum level of insurance you buy. It is very important to have UM/UIM insurance, and to be sure it is high enough to cover you. Check your policy.
How much should you get? Twenty years ago, most people were OK to get a 100/300 policy ($100,000 of coverage per person and $300,000 per accident no matter how many people were injured). With increased medical costs, this may not cover you today. The number one predictor of the value of any case is the amount of medical bills. Even a medium size accident can run up $25,000 in medical bills pretty quickly.
We recommend you get at least a 250/500 policy. That is $250,000 per person and $500,000 per accident. You will usually be covered by a policy of that size. And if you have assets to protect, get a policy high enough to protect them.
Before you decide against paying more for car insurance, you should call your car insurance company and see how much it would cost. You may be surprised at how little it is. If you are ever in a serious accident, you will be thankful you did.
And while you are at it, ask them about an umbrella policy too. If you have significant assets to protect, you better do it. We are not in the business of selling car insurance, but we do believe advising you to be covered is sound legal advice.
Why bother? Because if the injured person cannot get satisfaction from your insurance coverage, they get the excess amount from you personally. If you have a 30/60 policy, and cause an accident where the damages are $100,000 for one person, then you will have to pay $70,000 out of your own pocket ($100,000 damages minus $30,000 coverage). That can be financially ruinous, and you may have to file for bankruptcy.