Post by Tim Synar, Of Counsel — Civil Division
When an attorney with M.K. Bailey Law Offices meets with a potential client regarding an auto accident, one issue we must always discuss is insurance coverage. Frequently, the conversation will go something like this:
[Attorney]: Were you insured at the time of the accident?
[Potential Client]: Yes. I’m with “XYZ” insurance company. I’m fully covered. I have “full coverage.”
Unfortunately, the phrase “full coverage” is subject to differing interpretations. The truth is, there really is no cut and dry definition of full coverage auto insurance. What one insurance company may call full coverage can be drastically different from what another insurance company claims is full coverage.
We hope we can briefly and clearly lay out what you need to know about your auto insurance policy. Our goal here is to provide you with the information you need to make sure your insurance policy is to the standard you need for you and your family to feel “fully covered.” Our civil attorneys have the experience required for handling your personal injury claims.
Two Different Interpretations of “Full Coverage” Auto Insurance
# 1 – “Full Coverage” = Legal Minimum
So what does “full coverage” typically mean? Sometimes people refer to full coverage as the minimum liability coverage required by state law. The State of Oklahoma requires by law that its drivers maintain liability insurance coverage. The minimum requirements in Oklahoma are typically referred to as “25/50/25″ insurance. “25/50/25″ means:
This bare minimum insurance coverage protects you in the event you cause an accident that causes bodily injury to one or more persons, and also the property damage you may cause. Notice that this policy does nothing to protect you in the unfortunate (yet common) event that you were struck by an uninsured motorist. (See below about uninsured/underinsured motorist coverage)
What happens if you have “25/50/25″ insurance and you cause an accident which causes over $25,000 in bodily injury to another person? You could potentially be personally liable for the amount of damages above the $25,000 your insurance policy covers. This is why many individuals choose insurance policies above the minimum requirements. Some typical coverage plans include “50/100/50″ or “100/300/50.” This provides a greater amount of liability coverage and personal financial protection in the event you are liable for an accident causing serious bodily injury.
# 2 – “Full Coverage” = Liability, Comprehensive, and Collision Coverage
“Full coverage” to others means a policy that provides for liability, comprehensive, and collision coverage. We talked about liability coverage in the above paragraph. Liability coverage refers to insurance that covers you in the event that you are found liable for causing an accident which injures another individual and their property. Comprehensive coverage refers to insurance that covers damage to your vehicle outside of a collision, such as hail, wind, fire, vandalism, etc. Collision coverage refers to insurance that covers the damage to your vehicle when your vehicle overturns or collides with another vehicle or object.
This is what most people seem to believe is “full coverage.” In our experience though, even a policy with liability, comprehensive, and collision coverage ends up paying less than what most people expect will be covered by their “full coverage” policy. Below are two common and important optional car insurance coverages you may wish to consider.
Optional Car Insurance Coverages Which May Not Be Part of Your “Full Coverage” Policy
Uninsured/Underinsured Motorist Coverage (UIM)
While Oklahoma requires its drivers to have insurance, we know that not every driver follows the law. Oklahoma has nearly the highest percentage of uninsured motorists on the road in the country. In fact, a recent study by the Insurance Research Council shows that 24% of Oklahoma drivers are uninsured. It may be hard to imagine that 1 in every 4 drivers in Oklahoma are uninsured, but it is a reality that we shouldn’t ignore when making decisions regarding our auto insurance policies.
Uninsured/underinsured motorist coverage, (“UIM” coverage), is an additional coverage feature that protects you if you’re in an accident with an at‑fault driver who has no insurance or whose coverage is insufficient to cover the damages caused by the accident. It also protects you against an accident involving a hit-and-run driver if reported to the police within 24 hours.
Here’s an example of how uninsured/underinsured motorist coverage works:
You have $40,000 in medical bills following an accident, but the at‑fault driver has only the state minimum of $25,000 in liability insurance. Your UIM coverage would make up the $15,000 difference. Oklahoma law requires all insurance sellers to offer UIM coverage with every policy, but it does not require that motorists purchase this additional protection.
Medical Payments Coverage (MedPay)
Another common supplemental car insurance option is medical payments coverage (“MedPay” coverage). MedPay coverage can help cover the medical expenses of covered drivers and passengers after an accident, regardless of fault. MedPay is typically cheap, carries no deductible, and often covers other out‑of‑pocket costs that your health insurance policy probably won’t cover, including ambulance fees, chiropractic, dental, prosthetics and, in a worst‑case scenario, funeral expenses. Many people use MedPay coverage to supplement their health insurance in the event they are involved in an accident. Here’s one example of how MedPay works:
You’re driving in your lane when a teenager pulls out in front you, causing you to swerve off the road to avoid a collision. Your arm really hurts after it hit the steering wheel. Your wife, who was riding with you, hit her forehead on the side window and now has an ugly lump and a bad headache. Your child in the backseat suffers from a sprained neck.
If you chose MedPay coverage and selected a $2,000 limit, your MedPay would pay up to $2,000 for you, your wife, and your child for up to a total of $6,000. If each of your expenses were less than your $2,000 per‑person limit, Medical Payments coverage would cover your entire medical costs and you may chose to not even use your health insurance provider. In the event your expenses were more than the $2,000 per-person limit and you choose to file with your health insurance provider, the MedPay coverage would be very helpful in paying for your health insurance deductibles and other expenses.
There are many other optional car insurance features that you may want to consider. We have tried to simplify what “full coverage” auto insurance may mean (or not mean) while also including a brief description of a couple of common optional insurance coverage options (UIM and MedPay). We hope this assists you in understanding your auto insurance policy.