SKIPPACK, PA — A recent survey by Forbes Advisor revealed that many drivers are misinformed about their auto insurance coverage, potentially leading to substantial financial burdens in the event of an accident. The study found that half of the respondents falsely believed their policies included accidental death and dismemberment (AD&D) insurance, which is not a standard part of car insurance.
Charles Mandracchia, Esq., a legal thought leader, emphasized that car owners often purchase auto insurance without fully considering the financial implications of an accident. “Although most auto insurance policies typically cover standard accident issues and liabilities, the consumer should not assume that every aspect of risk and liability is covered,” Mandracchia said.
Mandracchia highlighted four key decisions consumers need to make when choosing their auto insurance:
- Choosing the Minimum State Coverage or More In Pennsylvania, for example, the minimum state auto coverage includes a liability limit of $15,000 per person, $30,000 per accident for bodily injury, and $5,000 for property damage. While opting for the minimum saves money initially, the savings may seem insignificant when faced with actual damage and medical costs from an accident. Maximizing coverage, especially in the area of medical coverage, is recommended.
- Adding Accidental Death and Dismemberment (AD&D) Insurance Contrary to popular belief, AD&D is not included in auto insurance. This coverage pays out in the event of death or loss of a limb or function such as sight, hearing, or speech due to an accident. AD&D insurance can be purchased as a standalone policy or as a rider to life insurance.
- Choosing Between Limited Tort or Full Tort Coverage Limited tort restricts one’s ability to sue other drivers for pain and suffering if injured or killed in an accident. Although full tort premiums are higher, limiting the right to sue could significantly impact one’s financial well-being due to medical and property liabilities.
- Selecting Realistic Limits for Uninsured or Under-insured (UM/UIM) Coverage and Medical Coverage Even in a no-fault state like Pennsylvania, opting for higher than minimum limits on UM/UIM insurance and medical coverage can be valuable to fully cover costs. This coverage benefits only the policyholder and their family, not the uninsured/under-insured driver, in the event of an accident.
Understanding the intricacies of auto insurance is crucial for drivers. As Mandracchia advises, “They should confirm, with a professional, that they have other insurance, such as life, comprehensive, and liability insurance to cover potential liabilities where auto insurance does not.” Making informed decisions about auto insurance coverage can prevent unexpected out-of-pocket expenses and provide peace of mind for drivers on the road.
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