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Understanding Car Insurance – Part 1

Car Accident InjuryWhen it comes to understanding auto insurance after a car accident, the first thing you need to do is break it down into a couple of categories. There are coverages for property damage, which include the vehicles, street lights, fences or whatever other property was damages in the accident. There are separate coverages for injured people, and that is what we will discuss here. We will add a separate post dedicated to property damage.

The Basics:

If you were injured in an accident, and the other driver is at fault, there are two injury related coverages that apply to you.

Med-Pay coverage:

This is a coverage that is on your own personal automobile policy, if you elected to take it. It is not a mandatory coverage in the state of California, but if you did decide to pay for this coverage as part of your insurance policy, it will cover your car accident treatment regardless of who is at fault, up to the policy limit. The most common limit is $5000, but your insurance adjuster will be able to answer that specifically. If you were not at fault for the accident, your insurance company will collect the amount paid under this coverage from the at-fault driver’s insurance company after they have paid your medical bills.

Bodily Injury Coverage:

This coverage is mandatory in the State of California. If you were injured in an accident, and the other driver was at fault, you will make a claim under the at-fault driver’s Bodily Injury Coverage. Keep in mind that this claim will be with the other driver’s insurance, not yours. You did not pay for this coverage. The other driver paid for this coverage to keep him or her out of financial trouble in the case that they hurt someone else, and in this case, the person they hurt is you.

This coverage does not pay your medical bills directly, so you will want to have your bills sent to your insurance company if you have Med-Pay coverage (from above). If you don’t have Med-Pay on your auto policy, don’t worry. Many clinics (this one included) will still be able to give you all of the care that you need to recover from your car accident without you having to pay any money up front or out-of-pocket.

Once all of your medical treatment is complete, and you are ready to settle your claim, the at-fault driver’s insurance company will review the medical records and billings, and offer to settle your claim. When the insurance company makes the offer to settle, they are attempting to settle your claims for the following:

  • Special Damages
    1. Medical Bills
    2. Lost Wages
  • General Damages
    1. Pain and Suffering

It is important that you understand that the settlement offer is being made in exchange for a release of all claims. Once you sign the release in exchange for your settlement check, you will no longer have any claim against the other driver. It is very important that you know what you are doing when settling your claim. You may wish to have an attorney represent you in this matter.

Other Insurance Coverage

The two coverages above are the most common that apply to an auto accident, but there are additional insurance coverages that may apply to your specific situation, such as Un-insured Motorist Bodily Injury coverage and Under-insured Motorist Bodily Injury coverage. These coverages have some interesting rules that make them both unique and complicated, but they won’t fit into this post. Both of these will be covered in a later post.

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