By Edgar Snyder, Esq.
We’re already well into 2012, and the economy doesn’t look like it will flourish any time soon. As a Baby Boomer, you may be retired or near retirement age. Understandably, you may be cutting back your finances and looking for ways to stretch every dollar.
Cutting coverage from auto insurance policies is becoming quite common for Boomers, as well as people from the Gen X and Gen Y eras. Before you jump on the reducing coverage bandwagon, know that it could cost you thousands instead of save you a few bucks a month.
Even though it’s illegal to drive without car insurance, nearly 14% of drivers are uninsured. Plus, plenty of other drivers don’t carry enough insurance coverage. If you’re ever in an accident, you need to have adequate coverage to protect your financial security – especially as a Boomer.
The good news: You can make changes to your auto insurance policy any point, so there’s no better time than now to make changes to protect your legal rights.
Reviewing Your Auto Insurance Policy
Choosing auto insurance coverage can be tricky, so here are some guidelines to help you understand the options available to you in Pennsylvania:
Bodily Injury Liability
Bodily Injury Liability covers any claims against you if you’re found legally responsible for causing an accident. By law, you must have $15,000 per person, and $30,000 per occurrence of coverage. However, that’s rarely enough to cover a person’s medical bills, and you could be held liable for their injuries if you don’t have enough coverage.
Minimum recommended coverage: $100,000 per person; $300,000 per occurrence
Tort
In Pennsylvania, you have the option of selecting Full Tort or Limited Tort. If you choose Full Tort coverage, you can collect money for pain and suffering if you’re injured in an accident, as well as compensation for medical payments, lost wages, and property damage. Limited Tort doesn’t allow you to collect money for pain and suffering. That extra money can go a long way for Boomers if you’re injured and are no longer bringing in full-time wages.
Recommended coverage: Full Tort
Medical Expense Benefit
This benefit pays for your own medical bills if you’re injured in an accident. Pennsylvania requires you to have a minimum of $5,000 of coverage. The types of medical expenses covered will be listed in your policy.
Minimum recommended coverage: $10,000
Collision Insurance and Comprehensive Insurance
Most banks that hold the title to your vehicle require you to have both. Collision Insurance pays for damage to your car that occurs from a collision or from overturning. Comprehensive Insurance covers damages if your car is stolen or damaged by fire, flood, hail, or other causes besides collisions or overturning. Comprehensive coverage can help protect your financial security, especially if you’re a Boomer who is retired and need to conserve spending.
Uninsured Motorist/Underinsured Motorist
These two types of coverage will protect you if you’re in an accident involving a person without car insurance or without enough coverage on their policy. Uninsured and underinsured motorist coverage is not required in Pennsylvania, but it is crucial to protect yourself and your financial security if you’re ever in an accident. If you’re in an accident with an uninsured driver, you could end up paying thousands – regardless of fault. Be careful what you sign, because you could be waiving your UM/UIM coverage.
Minimum recommended coverage: $100,000 per person; $300,000 per occurrence
Property Damage Liability
Property Damage Liability coverage provides money to pay claims if your car damages another person’s property. Pennsylvania law requires a minimum of $5,000 of coverage, but if you damage another person’s house or personal property, you can exceed that amount quickly.
Minimum recommended coverage: $25,000
Boomers, Be Smart About Auto Insurance
Many Boomers are entering their “Golden Years.” You want those years to be filled with happy memories, not financial ruin. One way to protect your financial future is to have adequate auto insurance coverage.
Don’t jeopardize your livelihood just to save a few dollars a month on auto insurance. It’s better to be prepared and enjoy your retirement years.
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Attorney Edgar Snyder has served the residents of western Pennsylvania and its surrounding regions for over 40 years. His advice comes from representing thousands of auto accident victims and their families. For more information on auto insurance, view our free e-book on How to Choose Auto Insurance at http://www.edgarsnyder.com/pdf/auto.pdf ..
