Auto Insurance an uninsured or underinsured vehicle. UM and UIM coverages generally
provide for excess medical expenses and lost wages if you are injured and
Auto insurance can be confusing. How much insurance is necessary? unable to work for an extended period of time.
What happens if I am in an accident? If it’s my fault, will I be sued? Is Some coverages are mandated by each state differently and some
my family protected? coverages are optional. Contact Donnelly Steen Risk Advisors to be
A standard personal auto policy consists of two main parts: physical certain that you possess the appropriate amounts and types of auto
damage and liability. Auto physical damage to your vehicle is covered insurance, such as Collision, Comprehensive, Liability, PIP/MedPay,
by collision and comprehensive coverage. Coverage for damages to other Uninsured/Underinsured Motorists, Roadside Assistance, and Rental
people’s vehicles and property is conveniently called “Property Damage.” Reimbursement.
Liability coverage protects you from financial responsibility for damages Coverages vary by state in both availability and mandatory minimum
or injuries to a third party, stemming from an incident in which you are limits, as does the types of negligence statutes used to settle claims
held liable. Inadequate or low limits of liability can be detrimental to involving two or more parties. Each state also mandates their own specific
your personal wealth if you have substantial assets and are deemed liable statute of limitations, which determines the amount of time in which an
for an automobile accident. Conversely, Uninsured Motorists (UM) injured party can file a lawsuit against a negligent driver. This is generally
coverage and Underinsured Motorists (UIM) coverage protects you from a period of 2 years, but some states have certain provisions that rely in
financial loss resulting from injuries sustained in an auto accident with insurance policies’ contractual language to set a statute of limitations.
Comparative negligence means that if the injured party is also at fault No-fault statutes, like that of Michigan, require that you buy certain
to a certain degree in an auto accident, their damages will be reduced by types of coverages in order to get your license plates. Under this statute,
that percentage of liability. For example, if Driver A is 80% responsible a Michigan resident that is in an automobile accident with no-fault
for an accident with Driver B, then Driver B’s recoverable damages insurance will be covered for resulting medical bills, lost wages, and
would be reduced by 20%. If total damages accrued by Driver B were damage to other people’s property. This statute protects insured persons
$100,000, Driver A’s insurance company would only owe $80,000 to from being sued for bodily injury, except in special situations such as
Driver B. Drivers that are 51% (50% in some states) or more at-fault for resultant death or dismemberment of a 3rd party.
an accident are not entitled to collect any damages.
*per person indicates the maximum limit that will be paid to each injured
Contributory negligence contends that if either party is the least bit at- person resulting in one occurrence – occurrence indicates the maximum
fault for an automobile accident, then neither party will be able to recover limit an insurance company will pay to all injured persons collectively,
any damages. For instance, if Driver A is 99% at-fault for an automobile resulting from a single accident or event
accident with Driver B, then Driver B is still 1% liable and is therefore
not entitled to collect any compensation for resulting damages.
The information provided in this material is exclusively intended to be educational and is in no
way meant to serve as professional advice. Insurance policies should only be purchased after
Please contact Ross Fronk for
consulting a licensed insurance representative. Donnelly Steen & Company Risk Advisors, LLC. more information: 888.657.5200
Donnelly Steen & Company | 1800 East Market Street | York, PA 17406