By law, you are required to have motor vehicle insurance if you drive on any public road in Maryland. What you may not know is that there are actually five kinds of automobile insurance. You likely have all five as part of your automobile policy. If you don’t, you should call your insurance carrier today and correct that.
- Liability Insurance. This is what most people typically think of when they hear the words “car insurance.” Liability insurance covers any claim that might be made against you by another driver, pedestrian, or property owner if you cause an accident. By law, you must have at least $30,000 in liability insurance to legally operate a vehicle in the State of Maryland. Driving without liability insurance is a criminal offense and you can go to jail. Liability insurance protects your assets if you cause an injury to someone else. It also pays for you to have a lawyer if you get sued. This is true regardless of whether or not you were at fault for the accident. You should carry significantly more than the $30,000 minimum. We recommend that you carry at least $300,000 in liability coverage.
- Collision Insurance. Collision insurance is not required by law but is generally a good idea to have. Collision insurance covers the repairs or replacement to your own vehicle in the event that you are involved in a crash. You can make a collision insurance claim regardless of who is at fault for the crash. Often, if you are not at fault, but make a collision insurance claim, your insurance company will work with the at-fault party’s insurance company to resolve the claim. If you don’t have collision insurance, you must deal directly with the at-fault party’s insurance to resolve your claim. If you don’t have collision insurance and are at fault, then you will not be compensated for your claim. Your collision insurance will typically have a deductible, meaning that you must pay money first before the insurance will pay. For example, you may be responsible for the first $500 or $1,000 of the cost of repairs, then the insurance will pay the balance. If you make a claim where you are not at-fault, your insurance company may go after the at-fault party’s insurance to recover the money they pay for your repairs and may recover your deductible as well.
- Comprehensive Insurance. Comprehensive Insurance pays for damage unrelated to a motor vehicle crash. It pays to repair or replace your vehicle if it is stolen or damaged in an incident other than a motor vehicle crash. Comprehensive insurance, for instance, would pay to fix or replace your vehicle if a tree fell on it and damaged or destroyed it.
- Uninsured Motorist. Uninsured Motorist Coverage compensate the policy holder in the event that they are injured and the at-fault party has no insurance. It is also available to compensate the insured when the at-fault party has insurance, but does not have enough to adequately pay for the injuries that were sustained. Uninsured motorist insurance is sometimes also called underinsured motorist coverage. By law, in Maryland, your uninsured motorist coverage will be equal to whatever your liability coverage is unless you sign a waiver agreeing to lesser coverage. Every auto policy must have at least $30,000 in uninsured motorist coverage. We recommend that you carry at least $300,000 in liability coverage.
- Personal Injury Protection. Personal Injury Protection (PIP) is included with every Maryland insurance policy unless it is specifically waived. PIP coverage reimburses you for lost wages and medical expenses incurred as a result of a crash. A PIP claim would be made against your own policy, or, for passengers, against the policy of the driver of the vehicle you were in. Pedestrians can also make a PIP claim. PIP does not cover any expenses other than lost wages and medical expenses, so you cannot make a PIP claim for pain and suffering. Nevertheless, PIP can be used to reduce the money that you have to reimburse for insurance liens or pay to medical providers. PIP policies are typically either $2,500 or $10,000.
We encourage our clients to carry at least $300,000 in liability and uninsured motorist and $10,000 in PIP coverage. You cannot control other drivers and you have no say over who might run into you and cause you injuries. You can protect yourself, however, in the event that you are hit by someone who has inadequate or no insurance. Even though everyone is required to have insurance coverage in order to drive on the roads, there are instances where people break the law and drive without it. Don’t let yourself be a victim of someone else’s misconduct.