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Does Your Automobile Insurance Need a Tune-up?

October 2015

Most of us do not delight in thinking about buying or paying for insurance policies. They are however necessary. Most people do not understand their insurance coverage and even fewer read their policies even though the law assumes they do. Books have been written about this topic, but let’s focus on automobile insurance and uninsured and underinsured motorist coverage right now.

There is nothing worse than having to tell a severely injured person that there is no insurance or insufficient insurance coverage to cover their medical bills, lost wages and pain and suffering. Or worse yet, they think they purchased coverage that they do not have.

How does this happen? People do not understand that the “reducing clauses” in their automobile insurance policy have language that can actually reduce their coverage. Most people understand that liability coverage will protect them if they screw up while driving and get sued. However, most people don’t know that their coverage for other people’s screw ups might result in their coverage being lowered. If the person that strikes you has insufficient coverage your underinsured motorist coverage (UIM) will kick in. You may be surprised to learn that your UIM coverage will be reduced by the at fault drivers coverage. In short, you may have paid premiums for $250,000 in UIM coverage, if you are hit by someone with only $50,000 in coverage and you receive that $50,000 your own insurance company will reduce your UIM coverage by $50,000.00. So, you pay premiums for $250, 000 but only receive $200,000. It doesn’t seem fair but Governor Walker signed the legislation repealing the” Truth in Auto Act” so that reducing clauses are allowed. It also allows the minimum liability coverage to be only $25,000.

In order to protect yourself, you should check with your insurance agent to make sure you are properly covered for liability, uninsured and underinsured motorist coverage so you do not get caught short. If you want a more in depth analysis feel free to email Attorney Schomisch or any of the litigation attorneys at Stellpflug Law, S.C.

Attorney John T. Schomisch, Jr.

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As always, seek the advice of a qualified legal professional regarding any legal issues you may have. You should not disregard professional advice or refrain from seeking professional advice because of anything contained in this article. The information contained herein is general and educational in nature. Because each case is different and each legal analysis is customized for individual clients, the information contained in this article should never be used to determine your legal rights.

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