I had the exciting start to my day today by being one (1) of four (4) vehicles in a car accident today. In case you are wondering, I am okay as were all the other drivers, yet it led to my thoughts today around this Daily Blog.
Do you TRULY understand how your Auto Liability Coverage works? Let me draw out the accident for you to get an idea:
Vehicle #1 (At Fault)——–>Hits Vehicle #2———–>Hits Vehicle #3————-Hits Vehicle #4 (ME)
Vehicle #1 rear ended Vehicle #2 pushing that Vehicle into Vehicle #3 which proceeded to be pushed into ME. My car experienced significant damage to the rear bumber, rear passenger back quarter panel and the power lift gate. Vehicle #3 will probably be TOTAL LOSS, vehicle #2 significant damage and OF COURSE THE CULPRIT, Vehicle #1 sustained minor injuries.
Now to the interactive part of this discussion and it will apply to both my Insurance Professionals and ANYONE that has Insurance.
Let’s assume Vehicle #1 has State limits of Insurance for California which would be 15/30/5. $15,000 per person in Bodily Injury/$30,000 per accident in Bodily Injury and $5,000 Property Damage. (Also I failed to mention at the scene nobody was injured)
Here is the question: Is Vehicle #1 Insurance policy going to cover the costs of my repairs? (answer will be in “Thoughts To Ponder Today” section) Assuming that the damage for the three damaged (not at fault) vehicles is $50,000, whose policy is going to pay for those repairs? Do you think Vehicle #2, Vehicle #3 and Vehicle #4 (ME) will have to utilize their Insurance even though they were not at fault?
The Police on the scene determined that Vehicle #1 is at fault for following too closely and is liable for the damages. Imagine you are Vehicle #1, do you know what your coverages are and do you have enough coverage to pay for the damages to Vehicles 2-4?
THOUGHTS TO PONDER TODAY: Vehicle #1 will have exhausted all of its liability coverage before covering the cost of my repairs. If the damage is above $5,000 (which it is), Vehicle #1 is liable for all the damages but his Insurance policy is going to only cover up to $5,000 worth of damage. Vehicle #2 will have to utilize her Insurance policy IF SHE HAS collission coverage and/or Underinsured Property Damage coverage and potentially pay her deductible (she can file suit against Vehicle #1 for loss sustained), Vehicle #3 will have to utilize her Insurance policy IF SHE HAS collission coverage and/or Underinsured Property Damage coverage (she can file suit against Vehicle #1 for loss sustained) and lastly ME, Vehicle #4 I have Underinsured Property Damage coverage I will have to utilize on my Insurance policy and if I choose I could file suit for the losses sustained that Vehicle #1 is liable. Many people assume that their Insurance will pay the max it can and that is where liability ends. SIMPLY NOT TRUE, in this example Vehicle #1 is liable for damage and if underinsured he has exposed himself to extensive lawsuit potential and that is considering that no one decides they were actually injured.
P.S. That Picture is the actual car that hit me this morning!
John Lucero, is a successful business owner with over 20 years of experience in multi-line insurance agency operations for several major National Brands. With an expertise in Recruiting, Educating, Coaching, Developing and Product Knowledge, his passion and drive to ELEVATE Insurance Agencies to higher levels of success is what keeps him inspired about the future and motivated about making a difference.
