Is Your Insurance Coverage Enough? Protecting Yourself When An At-Fault Party Has No Insurance

We see a lot of really bad things in our firm.  It tracks – we get involved when someone has experienced life-changing injuries or death. Injured parties are compensated by insurance policies in these situations, because the general person does not have enough assets to pay for damages they cause.

When a client is injured and parties do not have insurance coverage for bodily injuries, an injured client generally does not have any recourse. However, there is an exception - a person can protect themselves through specific coverage on their own auto insurance policy. In our experience, these types of coverage are not prevalent enough and are exceedingly important for everyone to have.

iStock - Credit: AndreyPopov

Why should you have to have a special coverage via your own insurance when the collision was someone else’s fault? The real, although crappy, answer is because although Texas law requires a baseline insurance to drive, and another reality is that drivers often do not follow the law. It is not fair, but the practical side is that fairness does not matter.  If an individual does not have insurance and is driving, then they also do not have assets to satisfy a judgment against them. This results in injuries to you and no means to obtain medical care. Further, you can be protected if a driver has the base policy required under the law, but the injuries you sustained require treatments exceeding the costs a $30,000 policy will cover.

While I agree with the unfairness, I am focused here and now on preparing you, so you can be protected against individuals who hit you while driving and do not have any insurance.

Full Coverage - Are You Really Covered When At-Fault Party has Little or No Insurance?

What does Texas law require? Texas law requires a driver to have at least $30,000 of coverage for injury per person, up to a total of $60,000 per accident, and $25,000 of coverage for property damage. It is a bit easier to think of coverage for property – if your vehicle is worth more than $25,000, and is totaled or your repairs cost more than this amount, then either your own insurance would have to kick in for coverage or you are out of luck.

The same thought process applies to bodily injuries.  If you are in a collision and your head strikes the window or steering wheel, or your back is so herniated that you need surgery to be able to deal with the pain, $30,000 is not going to cover treatment for traumatic brain injuries or a lumbar fusion. Scary huh? Or what if the driver causes a pile-up on the freeway? That $60,000 per accident is not going to cover many people injured in such a collision.

Full coverage means that you have at least a base policy under the law, including comprehensive and collision; however, it does not include additional, and oftentimes lifesaving, options. This results in you being left high and dry when the at-fault party has no insurance.

When an insurance agent is selling you insurance, their goal is to find a suitable, as well as affordable, option. You are also given the right to reject some coverage: person injury protection, uninsured or under-insured property damage or bodily injury coverage, or medical payments coverage, to name a few. Rejecting these can bring your policy costs down – but what is the cost if you are injured?

Coverage Options and Why You Should Reconsider That Rejection

Let’s dive into some of these and why we STRONGLY suggest you consider adding them back to your policy.

iStock - Credit: Bill Oxford

Personal Injury Protection. Personal Injury Protection (PIP) covers medical bills, lost wages, and some non-medical costs for you and your passengers.  It is paid out to you when proof of loss or medical expenses are submitted, and if you recover from a third-party insurer, you do not have to pay it back. If you have even a small amount of PIP, then in the event of an accident, some chiropractors will be able to treat you via physical therapy and can also advise you on whether you may need an MRI or more serious treatments. This coverage can give you a start, and some peace of mind. It won't always be enough, but it is a good start.

Uninsured and Under-insured Motorist. These are two different types of coverage that are usually linked together.  Uninsured Motorist will cover you when the person who hit you does not have ANY insurance available to cover your property damage or bodily injuries.  Under-insured, on the other hand, kicks in when your damages EXCEED the available policy limits on the other party’s insurance.

It is important to understand that you are able to have UM/UIM coverage for property damages but reject the bodily injury coverage, or vice versa.  We have had clients who believe their injuries are covered when another does not have insurance, to find out they had rejected the bodily injury coverage and only have property damage.  It is wise to review your policy with your agent, ask specific questions and fully understand what coverage you may have rejected.

Medical Payments.  MedPay coverage does exactly that – it will cover medical expenses up to the limits amount in your policy.  Unlike PIP, if you receive a settlement from an at-fault driver’s insurance, you will be responsible for paying this coverage back.

Why Health Insurance Is Not Enough

One of the other brutal realities of a car accident is that health insurance will not always guarantee appropriate health coverage in the event of an accident.

If you visit a hospital after a collision, they will take your insurance information and coverage will be based on your individual policy. EMS transport may or may not be covered by your policy as well.

  Treatment gets tricky when you need follow-up treatment. We’re talking physical therapy, imaging, or neurology, as well as any pain management treatment. Providers may be available through your insurance, but will they actually see you? Many providers do not want to treat individuals who have been involved in an accident. They know that they will likely be made a part of litigation, which will dive into their billing, treatment and other details of their practice, they will have to testify or be deposed, and have to respond to discovery requests. Litigation is difficult and many providers do not want to risk being a party. 

For this reason, we use a network of providers who treat under what is called a letter of protection. They are paid out of any settlement you may receive.  Oftentimes, we cover any deposits or advance payments specialists require.  It is a risk, but they do not require patients to have or present health insurance to provide treatment. Further, they build their practices upon the understanding of personal injury suits, so potential litigation does not scare them.  The key – you must be able to recover under insurance or this route to treatment is not an option.

Review your Coverage Today

            Now is the time to understand coverage available to you and review your policy. Once an accident has occurred, it’s too late to say you didn't understand the coverage you rejected. Have questions? Give us a call, we can discuss more in depth and get you on the right path.