Insurance Part 1

As an attorney helping injured clients navigate the waters of post-accident treatment, I read a number of accident reports and insurance policy declarations pages. When I meet with an injured client, I listen to the story of how the wreck occurred and assess the accident report to determine which driver is at fault for the accident. I must discuss medical care with a client. Eventually, the conversation turns to money and insurance. Does the injured client have health insurance? Is the client on Medicare or Medicaid? How will the necessary medical care be funded?

I explain that the driver who caused the accident might not be insured, or may not be sufficiently insured to cover medical bills and/or to adequately compensate the client. In such a case, I ask the client if he has an automobile insurance policy that can pay for medical bills. I ask about “Uninsured Motorist Coverage” and I might ask about “Med-Pay.”

Most of the folks who walk into my office have one of two responses to my questions: “I have full coverage” or “I have no idea what my car insurance covers.” The former are sometimes mistaken; the latter are always correct.

I also get the response of “I didn’t cause the wreck – why should my (health/car) insurance have to pay for anything?” This group is always correct in theory. As my law professors never seemed to realize, theory often dead-ends into practice. In practice we say “you can’t squeeze blood out of a turnip.”

No one spends $100 at Wal-Mart without knowing the contents of their cart. Why pay GEICO, Allstate, or State Farm $100 per month without knowing what is protected?

So, call your insurance agent. Go to your file cabinet or your insurance company’s website. Find your Declarations Page. And follow along with John Doe’s insurance policy:

Coverages Limits and Deductibles Premium
A. Bodily Injury $50,000 each person/ $100,000 each accident $40
B. Property Damage $25,000 each accident $16
C. Medical Payments $5,000 each person $4
D. Accidental Death $10,000 each person $2
E. Uninsured Motorists $50,000 each person/ $100,000 each accident $9
F. Collision $500 deductible $42
G. Comprehensive $250 deductible $15
J. Reimbursement for Emerg. Rd Srvc $30 each disablement $1


Coverages A, Bodily Injury, and B Property Damage:

This is “liability coverage.” This applies when YOU (the insured) are at fault, or when a permissive driver (your freeloading brother-in-law who borrowed your pickup for the weekend to move apartments) is at fault. It is required that all drivers in Louisiana carry this coverage. The minimum bodily injury insurance a driver can carry in our state is $15,000 per person, $30,000 per accident. The minimum property damage insurance a driver can carry is $25,000.

“$50,000 per person” Bodily Injury
As can be seen above, this policy carries “Fifty / One hundred Limits” or “50/100/25” which is much greater than the state minimum. Let’s assume John Doe causes injury to Driver Two (“DT”) with no passengers and causes $26,000 to DT’s Range Rover. DT treats with the greatest physicians for 8 months, misses important sales meetings (and doesn’t close as many huge deals as he is accustomed to closing), and racks up $35,000 in medical bills before his doctors make him great again. DT’s bodily injury and loss of huge earnings claims may be worth over $100,000, even millions of dollars, but the above insurance policy is only going to cover $50,000 (per person).

“$25,000 per accident” Property Damage
The above insurance policy is only going to cover $25,000 of the Range Rover property damage. That’s its limit.

$100,000 per accident” Bodily Injury
Same scenario with following changes: DT (the Range Rover driver) and his two kids are all injured, but not severely. The Rover sustains $10,000 in damages (busted taillight and a dent in the bumper) and the above policy covers the entire body shop bill. DT and his kids each receives $7,000 in medical care and treats with doctors for 5 months. DT’s claim, and each of the kids’ claims, may be worth $25,000 apiece. The above insurance policy covers all $75,000 because for each accident caused by the insured that involves multiple injured parties, the policy will cover up to $100,000 in total bodily injury damages (though still limited to $50k per person).

Minimum Limits vs. Bigger Insurance
Why carry more than minimum limits? When you, the driver, cause injury to another person, the injured party is not limited to your insurance policy for compensation. Let’s say you cause serious injuries or death to a driver and passengers of another automobile. Not only will that family seek to recover the limits of your auto policy, but they may seek additional compensation from you and your property. $30,000 does not cover weeks of hospitalization, surgeries, and therapy sessions. But your lakehouse ($150,000), boat ($25,000), savings account ($80,000), and 20 years of garnished wages can help pay off a $500,000 judgment.