Liability insurance for your motor vehicle is one of those necessary expenses you pay to protect yourself. However, the fact that you rarely need to file a claim can leave you vulnerable to making mistakes when it comes to your coverage.
Many people choose to prioritize the overall cost of a policy over the level of protection that it offers. This is a critical mistake that you should avoid at all costs.
There is a reason that the state requires insurance, after all. When you make a mistake that results in a collision, the expenses can far exceed what you can afford based on your current income and budget.
Insurance helps to protect you from financial liability in a crash, as well as the other people involved in any collision. However, there are situations in which you could find yourself without adequate coverage, including when the other driver does not have insurance.
Uninsured drivers generate risk for everyone else
There are many different reasons why someone may not have insurance on their vehicle. Perhaps they recently moved and did not receive notice that it was time to renew their policy. Other people may intentionally cancel or fail to pay their policy because of financial issues. Regardless of why a driver does not have insurance, their failure to secure a policy places you at risk.
If another driver causes a crash involving your vehicle, their insurance policy must cover your medical costs and property damage losses. While you may pay your insurance policy premium on time every month, your insurance coverage will not extend to cover accidents caused by uninsured drivers unless you have a special rider.
Indiana law requires that all new policies include coverage for uninsured drivers, as well as underinsured drivers. However, you have the right to decline these riders by requesting to waive them in writing.
Signing a form waiving your right to uninsured driver coverage is a mistake. The rider will cost you very little compared to the policy itself, and the protection it offers is invaluable.
Many insured drivers don't have adequate protection
There is a reason that uninsured driver coverage and underinsured driver coverage get bundled together. Both of these scenarios create extreme financial risk for anyone else involved in a crash with the driver. Those with tight budgets often opt for the minimum amount of coverage allowed under law.
These policies may not have enough property damage coverage to offset the expense of repairing or replacing a newer vehicle. The caps on medical coverage are also quite strict, which can leave those severely injured in a crash without adequate compensation for their medical costs and lost wages.
If you have already waived your right to uninsured or underinsured driver coverage, it is likely time to revisit that decision. Adding these riders offers a lot of protection for the cost. If you are about to buy a new policy, it's important to remember that this kind of coverage protects you in situations where you may be financially vulnerable.