2013 Spring (PDF) - Wisconsin Underground Contractors Association

Car Insurance cont.
The cost of purchasing the additional limits is relatively modest and should be given careful consideration.
The situation with respect to underinsured motorist coverage is even more concerning. Underinsured
motorist coverage protects you if you are injured by someone who does not have enough liability insurance
coverage to compensate you for the injuries they have caused. Underinsured motorist coverage is not
required at all. Insurers must offer limits of $50,000.00 per person and $100,000.00 per accident, amounts
which are again quite inadequate. You should carry at least the $100,000.00 per person and $300,000.00 per
accident limit that was formerly required. The cost of doing that is relatively modest. You can discuss the cost
and what limits would be adequate for you with your agent.
In deciding what to do about your underinsured motorist coverage, you should keep several things in mind.
Because the required amount of liability insurance is only $25,000.00 per person and $50,000.00 per accident,
there is a very real possibility that you can be involved in an accident with someone whose coverage is far
below what would be required to cover your medical expenses and compensate you for a serious injury.
Indeed, in recent years we have seen a number of cases where that has occurred. You should also remember
that the amount of your underinsured motorist coverage, under most policies, will be reduced by any amount
you recover from the insurer of the person who injures you, and possibly by other amounts as well. That
means that the limits you purchase are more than you will receive from your own company – one more reason
to ensure that those limits are adequate.
Let’s move on to the third-party coverage, which protect you if you injure someone else. Before doing that, I
would note that in recent years we have seen a number of instances where clients’ uninsured or underinsured
motorist coverage was less than the liability coverage which protects them against claims by others. In effect,
the policies were providing more protection to people who the clients injured than they were to clients if they
were injured. In my mind, that makes very little sense, particularly because the cost of protecting yourself and
your family through uninsured or underinsured motorist coverage is quite modest compared to the cost of
other coverage in auto insurance policies. The third-party coverage under an auto policy is property damage
coverage and bodily injury liability coverage. Property damage coverage is just what it sounds like-coverage
with protects you against claims for damage you may have caused to another vehicle or other property. The
minimum required coverage under our current law is $10,000.00. Given the cost of cars and car repairs these
days, that is simply not sufficient.
Bodily injury coverage protects you against claims by others who are injured in an accident which you cause.
The current required limits are $25,000.00 per person and $50,000.00 per accident. The law used to require
$100,000.00 per person and $300,000.00 per accident. We believe that is a far more reasonable amount of
protection. Given the costs of medical care, injury claims can easily exceed $25,000.00, and, in fact, it is not
rare to see medical bills well above that amount.
The cost of increasing the liability limits should be relatively modest. You may also want to consider
purchasing an umbrella policy, which would provide a far higher level of protection. Those are issues you can
and should discuss with your insurance agent.
It is our hope that you never have to use your auto insurance. If you do, you will want to be sure that you and
your family are adequately protected.
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