AUTO INSURANCE AND ASSET PROTECTION - HOW MUCH DO YOU NEED?

The results of an auto accident can be financially, physically and emotionally devastating. To help address this issue proactively, (the way any good Asset Protection strategy works) I asked my friend and Arizona attorney Michael Troncellito to give us some pointers. PART ONE of Michael's guidance deals with specific dollar amounts and types of automobile coverage insurance that are necessary to keep you safe in a sea of drivers of various skill, sobriety and legal capacity.

Yours, Ike

GUEST AUTHOR ATTORNEY MICHAEL TRONCELLITO

We all buy insurance because we are required to. Arizona and many other states have financial responsibility laws. Did you buy coverage to protect yourself from others with no or insufficient insurance? Probably not; not many people do. Most roll the dice hoping that the other drivers on the road will be at least as financially responsible as we are. However, the situation is often different than we hoped. We need to protect ourselves from these drivers with different types of insurance coverage.

The three most important types of coverage that I do not see enough accident clients have are:

-Medical Payments Coverage (“Med Pay”);

-Uninsured Motorist Coverage, (“UM”); and

-Under Insured Motorist Coverage (“UIM”).

Med Pay is a type of coverage purchased through your auto policy that will cover medical bills regardless of who is at fault for the accident. You can purchase varying amounts of Med Pay coverage. I recommend at least $5,000.00 worth of coverage to my clients. The premium is reasonable; usually between $85 and $120 per year. If you are not at fault for causing the accident, your premiums for Med Pay coverage will not increase. Use $5,000.00 worth of Med Pay coverage once and it will take the insurance company between 40 and 55 years to recoup that $5,000.00 in payments to you. If you don't have health insurance or have physical/medical conditions that could cause you to sustain greater than average injury you should have even more.

Uninsured Motorist Coverage is, in my professional opinion, an absolute necessity here in Arizona. If someone does not have insurance and causes an accident, you are likely out of luck when it comes to collecting your damages. But, if you have Uninsured Motorist coverage, your medical bills, pain and suffering, and lost income damages suffered as a result of an uninsured driver will be paid. Annual premiums on $100,000.00 per person coverage range from $85 - $185. If you did not cause an accident, your Uninsured Motorist premiums cannot rise simply by virtue of you using this optional and additional coverage.

Under Insured Motorist coverage is just as important as Uninsured Motorist coverage. They both work the same way. The difference is that Under Insured Motorist coverage will kick in and pick up the tab after the other driver’s insurance coverage is exhausted. The premiums are similar to Uninsured Motorist premiums, and the insurance company is prohibited from raising your rates for simply using the additional and optional coverage.

While I am not a fan of insurance companies, I am even less a fan of you not knowing how to protect yourself. If your insurance has not been reviewed lately, you should contact your agent. If your agent hasn’t called you in the last nine (9) months, you should get a new agent. Speak to a professional about these coverage types. If you have no one to speak to, feel free to call me. I can get you in touch with people who may be able to help you.

Our guest author, Michael Troncellito, http://phxinjurylawyer.com/ is an attorney who practices in litigation and personal injury law. He can be reached at mtroncel@cox.net or by calling his firm at 602-548-8595. Coverage limit requirements may be even more onerous for many of our high net worth readers and clients - always use information of this type as a general guide of issues to examine, not legal advice specific to you and your family.