Did you know that ALL 50 states require some kind of proof of “financial responsibility.” Simply rephrased – if you have an accident and you are AT FAULT – the state you live in expects you to have some way to pay for injuries to the other people who were injured or property that was damaged (most often the other vehicles involved). This is called Liability Insurance. States require every driver to have the minimum level of insurance required by that state.
In Ohio the minimum limits for Bodily Injury Liability Insurance are $25,000 per person and $50,000 per accident ($50,000 for ALL people who are injured). So, if you are the injured “OTHER PERSON” do you think $25,000 is enough to pay for a visit to the emergency room plus a couple of days in the hospital, a few X-rays or MRIs or CT scans, plus a few doctors’ visits and maybe an operation and physical therapy to get you back on your feet and back to work?
There are higher levels of coverage that can be purchased and a lot of Bodily Injury Attorneys would be happy to help the OTHER PERSON collect more money than the AT FAULT Driver’s insurance policy covers. If the attorney sues the Insurance Company and settles for more money than your limits – and don’t forget the attorney is NOT going to take your case unless they can make some money, also – where does some of that extra money come from? It comes from the other people who are insured by the same insurance company as the AT FAULT driver. Some companies do not include the Attorney fees in the Limit of Coverage and that can be one of the costs that is in excess of the Limit of Coverage. Then the attorney starts looking at what the AT FAULT Driver owns or the AT FAULT Driver’s Family owns that can be sold to cover damages and injuries.
- Risk Transfer: Individuals pay a fee (premium) to shift the financial burden (“financial responsibility” from the opening of this article) of potential losses, such as accidents or illnesses, to an insurer.
- Risk Pooling: Insurers collect premiums from a large group of people to pay for the losses of the few who actually experience them.
People call me every day about how expensive their auto insurance is. They tell me they haven’t had an accident or violation for 20 or 30 years. Why is the cost of their insurance increasing? One of the causes is the large number of lawsuits that are filed and insurance companies pay. Where does the extra money come from? From the other policy holders.
The insurance companies don’t make a product to sell, like a lawn mower. They sell their experience in paying / protecting their policyholders. Your insurance of any kind doesn’t do much until you have a claim. And your insurance has limits. You choose the limits. If you are the At Fault driver, you want your company to cover the losses you caused so people aren’t suing you for the money you owe for injuries or damaged property. The cheapest coverage may not cover your financial obligations.
Driving has become a very high risk experience. Look up statistics for accidents by age or by city or state and you will see some mind-boggling numbers on the internet, especially for teenage drivers. DRIVE SAFELY AND MAKE SURE YOUR CHILDREN AND GRANDCHILDREN DRIVE SAFELY.
