Insurance F.A.Q.

Ultimately, the at-fault party is responsible to compensate injured parties for all of their economic and non-economic harms and losses. These damages include obvious losses like lost wages and medical expenses as well as less obvious harms and losses like inconvenience, emotional distress, and physical pain. The real issue involves who actually pays for these harms and losses.

As you can imagine, in many cases the at-fault party does not have enough insurance, or none at all, to fairly compensate the injured parties. If this occurs, "uninsured/underinsured motorist" coverage may come into play.

In July of 2003, Colorado switched from a system of "no-fault" automobile coverage, to a pure "tort" based system. What this means practically is that your health insurance is the primary source of medical treatment in the event you are injured in an automobile accident.

More than 20% of Americans are without health insurance. If you have been injured as a result of someone else's negligence and you do not have health insurance, you may find that obtaining quality treatment for your injuries is difficult. There are solutions.

Insurance carriers must act in good faith in all dealings with their policyholders. Insurance should help people when they need it most. When you suffer a loss, insurance delays and denials inflict further harm that insurance was designed to avoid. Since few know how insurance works, the industry and courts have adopted informal "rules of the road" to guide insurance companies on how they should behave and not behave.

If there is one thing plaintiffs' lawyers and insurance agents can agree on, it is that everyone needs to be sure they have enough insurance to protect you and your family should the unthinkable occur.

The first way you can do this is to be sure you have included substantial uninsured/underinsured motorist coverage (UM/UIM) in your automobile policy. Most people are surprised at how little it costs to add substantial protection in the form of UM/UIM coverage.

UM coverage protects you from a negligent driver who has no insurance while UIM coverage protects you from a driver with only minimal coverage. We recommend you purchase at least $250,000 in UM/UIM coverage. Why so much? Remember that your health insurance company will likely have a right to be paid back for any accident related care it provides you. Thus, if you are involved in a serious accident in which your medical expenses exceed $100,000, standard insurance policies will leave you with little, if any, money for reimbursement of lost wages and other harms and losses.

Thus, we encourage you to talk to your automobile insurance agent to learn about your UM/UIM coverage. For a few extra dollars every month, you can be sure you and your family is protected in the event of an accident caused by someone with little or no insurance.

If you have substantial assets (for example, you own your home), be sure you also talk with your agent about your levels of liability coverage. Let's face it, we all make mistakes. If you are at fault in an accident and cause someone significant injuries, you want to make sure you have enough liability coverage to fully compensate for the injuries you cause. Many people wrongly believe that they cannot be held personally responsible for any damages if they have automobile insurance. This is not true. You are responsible for all of the economic and non-economic harms you cause. The last think you or your family wants to face is the prospect of personal liability because your amount of coverage was inadequate.

The following types of coverage are typically included in automobile insurance policies:

• Property Damage Liability - covers property damage caused by your car in an accident.

• Bodily Injury Liability - covers personal injuries and damages caused by you and individuals covered under the policy (read the policy language carefully to determine who is covered). Also covers any legal expenses incurred in defending an action arising from an accident. The policy requires your insurance company to pay for lawyers it chooses to defend you if you face suit due to an accident.

• Medical Payments - This coverage generally provides "primary" medical coverage for accident-related injuries regardless of fault. The coverage is typically "primary" because it provides coverage before any other policies including health insurance.

• Uninsured/Underinsured Motorist Coverage - This coverage provides benefits to you and occupants of your vehicle for injuries caused from underinsured or uninsured vehicles. This coverage also protects you, even if you are not in your vehicle, from hit-and-run drivers.

• Collision Coverage - This coverage reimburses you, minus your deductible, for damage to your vehicle.

• Comprehensive Coverage - This coverage reimburses you for damage to your vehicle by several different causes including theft, flood, fire, wind, etc. Your deductible will also apply.

Information concerning exactly how automobile insurance companies set their rates is a tightly guarded secret. What is known is that insurance companies consider the following factors in determining rates:

• Accidents - Obviously, prior accidents are one way to gauge future risk. The more accidents, the higher the risk. Even minor accidents can increase your rates.

• Credit Rating - Many people are unaware that poor credit can mean higher insurance rates.

• Age - It is probably not surprising that young males and elderly drivers are most at risk of accidents. Thus, these age groups pay higher rates. Who said nothing good came with your 25th birthday?

• Gender - Women have fewer accidents than men. Thus, they pay reduced premiums.

• Location - The more densely populated the city you live in, generally speaking, the higher insurance rates you will pay.

• Marital Status - Statistics show married people are involved in fewer accidents. Thus, married individuals pay lower rates.

• Traffic Tickets - Most know that speeding tickets and other traffic citations raise our insurance rates. The faster you drive, the more likely you will be involved in an accident. Some insurance companies will not insure people who have had many traffic citations even if they are accident-free.