Having the right coverage for your vehicle

I was recently hired by a new client who was not only the victim of a severe head-on collision, but she was also probably the victim of poor (or perhaps no) advice from an insurance agent. 

You see, she had just purchased a new $20,000 vehicle. When she called her insurance agent to obtain insurance, she expressed that she wanted to get the "least expensive" policy possible. 

Therefore, without any discussion, he simply put her in a "liability only" insurance policy with the lowest limits of $15,000. That meant that if she was responsible for an accident, she would be covered for liability up to $15,000. However, the policy did not provide for anything else. She trusted that he got her adequate coverage, because after all, he was a professional insurance agent.  As it turned out, the coverage was too basic for her needs.

After the head-on collision, she came to my office for advice.  I explained that the only way she could get her car fixed was by going through the other party's insurance company. In other words, the other party would have to concede to fault. She couldn't turn to her own insurance company because she didn't have "collision" coverage under the policy. 

Also, because she didn't have health insurance, she had no way to get medical treatment until the other side conceded fault.  She also didn't have "medical payments coverage" under her auto policy so she was unable to seek medical care through that avenue.  I told her that we might be able to proceed on a lien basis (where the healthcare providers would defer payment till she collected from the other party), but it was too risky to do so without knowing what the police report said for sure. Otherwise, she might be digging herself into a financial hole full of medical bills.  

I trusted that the accident wasn't her fault, but that doesn't prevent other people from saying otherwise, including a police officer.  I've come to learn after over 20 years of practicing law, that a 2 car accident often results in 4 different stories!  

The lesson is this:  It is an insurance broker's responsibility to recommend and provide the correct coverage to a client. Then, after figuring out what the "correct" coverage is, he/she can look for a competitive price from a good company.  Selecting the cheapest policy is not a service to the client, especially when they are not adequately insured. 

Also, when you shop for insurance, your focus shouldn't be only on the price. You should be asking yourself whether or not you were getting the correct kind of coverage for you and your family. That way, you won't be dependent on an opposing insurance company when you get into an accident and need help.