The Filutowski Law Firm, PLLC

During an economic recession, everyone is pinching pennies – but your auto insurance coverage should not be one of those places. A few dollars savings now will not help you in the future, when there’s an accident, or accruing medical bills.

This article will walk you through the insurance requirements under Washington law and what all the insurance abbreviations stand for: BI, PD, PIP, UM, UIM, enabling you purchase the best coverage that protects YOU.

1. Know the law.

   
   Washington State law requires drivers to carry liability coverage, at a minimum. RCW 46.30.020 and RCW 46.29.090(1), requires that every driver within the state of Washington carry at least $25,000.00/$50,000.00/$10,000.00 in liability coverage.

   The first two numbers correspond to bodily injury (“BI”) – i.e., if you cause an accident, your insurance will pay to the other person(s) up to $25,000.00 per person or $50,000.00 per accident. If there are two or more people injured, they will have to apportion the available $50,000.00.

   The third number is property damage (“PD”) coverage. Washington law requires that you carry at least a $10,000.00 limit, which is the maximum amount that will be paid for damaging another’s vehicle.

   If you fail to purchase liability coverage, you expose yourself to personal liability for causing the accident and a traffic citation. That means that the injured party can garnish your wages, force a sale of your car, home and other assets. Nobody wants to go through this uncomfortable process.

   So, make it easy for yourself and others, follow the law and at least purchase the minimum liability coverage.

2. What are you worth?

   In selecting the appropriate liability coverage for your car, you need to consider the size of your income, the value of your home, your car and additional assets. The higher your personal net worth, the more liability coverage you should purchase to protect yourself from personal liability. Washington State bodily injury policies range from $25,000.00/$50,000.00 to $300,000.00/$500,000.00.

   Moreover, many vehicles are worth well in excess of $10,000.00. So, again, if you have a greater net worth and want to insure against someone suing you personally for additional money, purchase the additional PD coverage.

3. Protect yourself against accruing medical bills.

   If you are the victim of a car accident, pedestrian-car accident, bike-car accident – your PIP will *automatically* cover your medical bills! No deductible, no contracted rate 50/50, 80/20, like with health insurance.

   PIP stands for Personal Injury Protection. This coverage is *optional*, although *essential* if you want to have your medical bills, out of pocket expenses and lost wages covered adequately and immediately following the accident. PIP limits range from $10,000.00 to 35,000.00

   $10,000.00 is bare-bones coverage – it’s enough to cover an ambulance ride, emergency room visit, x-rays, and maybe a follow-up visit to the doctor. For those few extra dollars every 6 months in your insurance premium, the additional $15,000.00 in coverage is well worth it!

   Since PIP is so strongly encouraged – in Washington you must affirmatively *opt-out* of buying PIP. Once you opt-out, if you decide you do want PIP, you must then affirmatively opt-in.

   If you’ve been insured with the same insurance company for years – and don’t recall if you opted-out – call your agent today! Ask for the PIP waiver, if any. Then buy some PIP and be protected today!

4. Insure against serious personal loss.

   Each day you step out onto the roadways – you subject yourself to the mercy of others’ driving abilities. In the event one of those drivers is texting, changing the music channel, scrolling on their ipod, fails to check the side view mirrors, or is under the influence – causes a serious collision with serious injuries – you want to be protected.

   But what happens when the person who causes the accident either has 1) no insurance! or 2) minimal coverage? You should consider insuring yourself against this situation by purchasing under-insured (UIM) and uninsured motorist (UM) coverage. Again, for a few extra dollars every month, you can insure against serious loss. Policy limits range from $25,000.00 to $500,000.00.

   UM/UIM coverage provides payment for your pain and suffering and medical bills incurred as a result of someone else causing an accident.

   UM applies when the negligent driver has NO insurance.

   UIM applies when the negligent driver’s limits have been exhausted. E.g., if the negligent driver carries a minimum limits policy (25/50/10), and you collect the full $25,000.00, but your claim is valued well in excess of $25,000.00 – then your UIM coverage will apply.

5. Review your declarations page.

   Now that you’ve selected the types of insurance coverage you want, review your declarations page to ensure you and your vehicle(s) are fully covered.