Most people know they need auto insurance coverage not only to cover property damage claims but also personal injury claims made against them.  If you are negligent your insurance company provides a defense for you against claims for your negligence.  What many people do not realize is that it also covers you if you are injured in an automobile collision, and someone else is negligent but either doesn’t have insurance or doesn’t have enough insurance to cover your claim.  This is called under or uninsured coverage.  In such a case you make a claim against your insurance company. 

The Commonwealth of Virginia requires you to have insurance coverage of at least $25,000.  If that doesn’t sound like a lot, it’s not.  If you have had the unfortunate experience of being hospitalized for a prolonged period of time you know it doesn’t take very long to exceed that $25,000 minimum amount of insurance the state requires.  But how much is enough?  There are many out there driving around with coverage of $300,000 or less, and I contend that for many people that is simply not enough coverage.

If you or a family member are injured in an automobile accident or collision as a result of someone else’s negligence and it is not your fault you can sue the “at fault” party for your damages including medical expenses, loss of wages, pain and suffering, disfigurement etc.  You need to have a significant amount of under or uninsured coverage to meet your needs in case the other party has no insurance or not enough insurance.  A limit of $1,000,000 in coverage is not all that high anymore.  A person permanently disabled who only has $300,000 in coverage will be in sad shape.

You also need to consider that if you are the party who is at fault and a judgment is obtained for more than the amount of coverage that you have your insurance company will pay up to the limit of your policy and you will be responsible for the rest.  If for example you have coverage limits of $300,000 and the party suing obtains a $1,000,000 judgment the insurance company will pay out the $300,000 and you are on the hook for $700,000.  The injured party can then come after your assets to try to realize on the judgment.

If it sounds like I may have an interest in an insurance company and am trying to sell more insurance I can assure you that is not the case.  I can tell you of a client who we were able to obtain a jury verdict for $1,000,000 but were able to collect less than $150,000.  If she or the other party had enough coverage she could have received a full recovery.