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What you should know about insurance coverage
Under Missouri's Motor Vehicle Financial Responsibility Law, the owner of a motor vehicle is required to have at least $25,000 in liability insurance for that vehicle.
Although liability insurance is legally required to be carried for all vehicles, there are other types of insurance coverage available that can help protect you in case of an accident. It is recommended that you occasionally review your insurance policy to make sure you have all the coverage you need. Many people state they have "full coverage", but few of them understand what that coverage actually is. Just because you told your insurance agent you want full coverage, it does not mean you actually have all the coverage you need to protect yourself. Below is a list and brief description of the types of coverage available.
Basic Liability Coverage: This is the most common form of coverage and the only coverage required under Missouri law. With this type of insurance, the insurance company agrees to pay money to people who are harmed by the negligent acts of their clients. There are usually 2 different amounts: a maximum dollar amount they will pay to any one person; and, a total dollar amount they will pay to all persons involved in any one incident. This can be a problem because these minimum amounts are not always sufficient to satisfy the needs of the injured party or parties.
Underinsured Motorist Coverage: Underinsured motorist coverage is an option on most insurance policies. This protects you in the event that the person who hits you, the liable (at-fault) party, does not have enough insurance to pay for your damages. If you have this coverage, you may be entitled to collect additional compensation from your own insurance company for your injuries after you have collected from the liable party. Please read your policy carefully as many policies specify that your liability limits under this coverage must be more than the limits carried by the liable party. This insurance is generally defined as excess or secondary, which means that all other applicable liability coverage must be exhausted before you can collect under this provision.
Uninsured Motorist Coverage: Uninsured motorist coverage protects you in the event that the person who hits you, the liable (at-fault) party, does not have any insurance. In some cases, depending on how your policy is written, you may also be covered in the event of a hit-and-run type accident if the police are unable to locate the responsible party. Please check your insurance policy carefully to determine if you have this coverage, and if so, what limits of liability you carry.
Medical Payments Coverage: Medical payments coverage is an optional coverage on your automobile insurance that pays for medical treatment that is necessary as a result of injury while. This coverage is extremely important; generally it does not matter who is at fault in a wreck for this coverage to apply. Regardless of whether you are rear-ended by someone at a stop sign or you lose control of your vehicle and end up in a ditch, if you are injured this coverage may pay for your medical bills. Many people are unaware of what this coverage actually does and they only carry one to five thousand dollars coverage. This coverage is generally inexpensive and with some companies you can obtain up to $100,000 worth of coverage. Another important feature of this coverage is that they generally have no right of subrogation. This means that regardless of whether your medical bills have been paid by your health insurance company or not, you can get compensation based on the total amount of your medical bills, NOT just the bills that are unpaid.
Collision Coverage: This type of coverage guarantees that YOUR insurance company will repair or replace your vehicle in the event of an accident. If you vehicle is financed, your loan company will most likely require you to carry this type of insurance. Without collision coverage, your insurance company is not required to pay for repairs for any damage to your vehicle, and if the accident is your fault, you could end up having to pay for those repairs yourself.
Comprehensive Coverage: This type of coverage protects your vehicle if it suffers damage due to something other than a collision, like a storm or vandalism. Without this type of coverage, your insurance company is not required to pay for damage from things like hail storms, tornados, etc.
"Gap" Coverage: If your car has been totaled in an accident, the insurance company (either yours or the responsible party's) is only required to pay what is considered the "fair market value" for your vehicle. If your vehicle is financed, this amount may be different from what you still owe on the loan. Even if your vehicle is totaled, you are still responsible for the outstanding balance of the loan. Gap coverage is intended to cover the difference between the amount you still owe on your car loan and the value of your vehicle at the time it is totaled. This type of coverage can be purchased either from your insurance company or directly through the finance company.
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