Risk & Business Magazine General Insurance Services - Fall 2020 - Page 8

UNDERINSURED Avoiding The Mistake Of Being UNDERINSURED A key aspect of insurance, and perhaps one that many people are not familiar with until it is too late, is the fact that it is entirely possible to be underinsured or insured for the wrong things. Many people mistakenly believe, both in the personal and the business world, that being required to carry a certain insurance (or a certain amount of insurance) by law means that carrying that exact insurance will keep them safe if they need to use it. Unfortunately, that simply isn’t the case. Most states, for instance, will require car owners to have coverage on their vehicles in order to register them and use them on the road (or pay an uninsured motorist fee). The required amount, however, is usually for liability purposes only and will not cover you in the event that you are found to have caused the accident. Worse, in the case of bad accidents (especially with medical issues involved), it will likely not be enough to cover the damages at all no matter who is at fault. Nick Otis, with Newby Lewis Kaminski & Jones, LLP, has seen this issue firsthand during personal injury cases he has handled. In his own words: “As a bit of background, I will often ask clients how much insurance coverage they have, and their response is full coverage. That doesn’t tell me how much coverage they have. For example, Indiana requires a minimum of $25,000 in insurance coverage per accident. However, if you are in a bad accident, $25,000 will not be enough coverage. Often what I see happen is an individual who causes a crash doesn’t have coverage or only has the minimum $25,000 of coverage. That’s why it’s important to have uninsured or underinsured motorist coverage to protect yourself if you’re hit by someone with no coverage or low coverage.” Coverage usually comes in set amounts, in ranges between $25,000 and $250,000. There is a broad range in there to work from. Choosing the minimum is often not the best option, especially when considering the price differences. Additionally, companies often offer umbrella coverages, which will provide an additional $1,000,000 in overage for vehicles and the home. Nick recommends, especially for anyone with young children or a family, to carry at least $250,000 in coverage and taking the umbrella option as well. In this way, if you are ever severely injured or killed, it will be a huge source of financial support for your family. That brings the key question into light: Do you have enough insurance? If not, you may be in for a rude awakening when it comes time to use it. That may mean that you don’t get your own car fixed or it may end up being a question of how much money you are suddenly out of pocket to pay for someone else’s claim. + Nick Otis has extensive experience in representing clients for claims of personal injury, property damage, and wrongful death in both state and federal courts. Nick also has experience representing employers and employees in employment matters in state and federal courts, and employers in labor negotiations. A former deputy public defender for La Porte County, Nick now serves as a federal public defender under the Criminal Justice Act for the Northern District of Indiana. He is also experienced in appellate work and has argued before the United States Court of Appeals for the Seventh Circuit, the Indiana Court of Appeals, and the Indiana Supreme Court. In addition, Nick represents various school corporations and serves as the City Attorney for the City of La Porte. BY: NICHOLAS T. OTIS, PARTNER, NEWBY LEWIS KAMINSKI & JONES, LLP 8