When purchasing automobile insurance, you need to be an advocate for yourself, and unfortunately, you cannot trust the insurance agents who sell the insurance to properly advise you on these matters. Over the past year, we’ve come to realize that many of our clients, and our closest friends and family members, do not have adequate automobile insurance coverage; and that many people do not even understand the coverage that they have. Many of our clients have what they think is “full coverage” but in fact they only have minimum limits of protection.

First of all, to see what car insurance coverage you have, you need to look at the “declarations page” of your insurance policy.

When purchasing automobile insurance, it’s important to understand the various types of coverage that are available, and to be sure that you actually purchase the coverage that you need. Quite often, the insurance agents who sell insurance policies will try to talk you out of buying important coverage such as PIP coverage. NEVER WAIVE YOUR PIP COVERAGE! The basic types of coverage in an automobile insurance policy are: liability coverage, collision coverage, uninsured motorist coverage and Personal Injury Protection Coverage (aka PIP Coverage) (MedPay Coverage is similar to PIP Coverage). Coverage is often available for rental reimbursement as well.

With regard to automobile liability coverage, this protects you and authorized users of your car in case you cause a car crash that injures someone else. The minimum limits of liability coverage vary from State to State. In Maryland the minimum is $20,000.00; in Virginia its $25,000.00 and in Washington, D.C. The minimum limit of liability coverage is $25,000.00. In Maryland there is currently legislation pending to increase the minimum coverage to $30,000.00. I recommend that you purchase liability coverage in an amount that equals the value of your assets.

Uninsured motorist coverage protects you and the occupants of your vehicle if they are injured by an unidentified vehicle, an uninsured motor vehicle or a vehicle that has only minimum liability coverage (aka an underinsured motorist). Therefore, if you can afford it, you should purchase as much uninsured motorist coverage as possible. At a minimum, everyone should have at least $100,000.00 of protection. In Maryland, uninsured motorist coverage must equal the liability coverage unless a proper waiver is signed.

Personal Injury Protection Coverage, which is also known as PIP Coverage, is no fault insurance coverage. In Maryland policies must be sold with at least $2,500.00 of PIP coverage. It covers medical expenses incurred as a result of the car crash, and also pays up to 85 % of lost wages. I recommend that if at all possible, try to buy at least $10,000.00 in PIP coverage. It is very inexpensive, and it provides no fault protection which essentially means that the insurance company pays it out regardless of whether or not the car crash was your fault or someone else’s fault. PIP coverage is mandatory in Maryland (unless waived in writing), but it is optional in Washington, D.C. and Virginia. For Virginia policies, the term “PIP Coverage” is not used. Instead consumers can purchase “Medpay Coverage” which pays medical expenses but not lost wages.

Collision Coverage pays for property damage to your vehicle if you are in an accident regardless of whether the crash was your fault or someone else’s fault.

If you are involved in a serious car crash in Maryland, Washington, D.C. or Virginia, having adequate auto insurance coverage will save you and your family a lot of headaches. The bottom line is that we encourage our friends to buy as much liability coverage, uninsured motorist coverage and pip coverage as they can reasonably afford.