This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

You Might Have Less Car Insurance Than You Think!

"I'd call your insurance agent to ask, especially if you have a relative coming to visit who will use your car," Gusner says.

2. Confusing underinsured motorist coverage

Underinsured motorist (UIM) coverage kicks in when the at-fault driver doesn't have enough liability coverage to pay all your medical bills after you suffer injuries in an accident. ( Uninsured motorist coverage pays for medical treatment when the at-fault driver has no insurance at all.)

That might sound simple, but the payout for UIM is complicated. Why? The amount paid from the at-fault driver's liability coverage is deducted from the amount you can claim against your own UIM coverage.

Say, for instance, you face $50,000 in medical bills for injuries after a car accident; the at-fault driver has $25,000 in bodily injury liability coverage, and you have $25,000 in underinsured motorist coverage.

The payment from the other driver's policy -- $25,000 -- would be deducted from what you can claim on your $25,000 of UIM coverage. The result: Your UIM insurance would pay nothing and you'd be $25,000 short of the $50,000 you need.

Your UIM coverage must be higher than the at-fault driver's liability limits to do any good.

In some states, you can "stack" your UIM coverage - meaning combine the limits on two or more vehicles you've insured to get more protection. And in Connecticut, you can buy "conversion" coverage, so payments from your policy are not reduced by payments from the at-fault driver's insurance.

Gusner says you should make sure you know how your UIM coverage works and evaluate whether to  increase the limits on your policy.

3. No coverage for injuries if you drink and drive

Thirty-seven states have alcohol exclusion laws, which allow insurance companies to deny medical coverage for injuries due to intoxication, according to the Governors Highway Safety Association. That means in those states your insurance company could refuse to pay for your medical treatment if you crashed and were injured while driving and impaired by alcohol or drugs.

4. Coverage excluded for unlicensed drivers

Some policies exclude coverage if an unlicensed driver uses your vehicle and crashes. Bottom line: Be super picky about who drives your car.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs