BUYING CAR INSURANCE IN SOUTH CAROLINA

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1 BUYING CAR INSURANCE IN SOUTH CAROLINA Do you think your Auto Policy Protects You and Your Family For the Road Ahead? The Truth May Surprise You. Goose Creek 103 Laurel Ave. Goose Creek, SC Phone: Toll Free: Mt. Pleasant (By Appointment 222 W. Coleman Blvd. Mt. Pleasant, SC LeekeLaw.com

2 BUYING CAR INSURANCE IN SOUTH CAROLINA Do you think your Auto Policy Protects You and Your Family For the Road Ahead? The Truth May Surprise You. 1 ST EDITION

3 BUYING CAR INSURANCE IN SOUTH CAROLINA The Insurance Companies Will Sell You An Insurance Policy and Accept Your Premiums. What They Won t Tell You Is If You Have The Coverage You Really Need Should You Be Involved in An Accident.

4 1 ST Edition Copyright 2009 by Shelly M. Leeke All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission of the author. Printed in the United States of America.

5 DISCOVER INSIDE: What is really required to drive in South Carolina Why full coverage means nothing What the terms UM, UIM and PIP really mean How to protect yourself and your family against uninsured or underinsured drivers What coverage you really need to protect you and your family

6 WHY SHOULD I LISTEN TO YOU? First, I would like to thank you for requesting this report. I wrote this report so you have the information you need to understand the basics of automobile insurance coverage and the types of coverage you need to protect you and your family in the event of an unfortunate accident. I believe consumers deserve good, quality, helpful information so they can protect themselves and their families against negligent drivers. I have learned through meeting with hundreds, if not thousands, of potential clients, that most people are actually unaware of what coverage is available under their own insurance policy. I believe this lack of knowledge comes from the insurance companies failure to adequately explain the insurance policies they proactively sell. I do not believe this is a mere oversight by the insurance industry, but rather a deliberate attempt to prevent consumers from buying truly adequate coverage and protection for their families. I don t sell insurance, I am a lawyer. This report is based on my interaction with many individuals and families who have faced unfortunate circumstances after being involved in accidents because they were not protected by the insurance policy they purchased from their own insurance agent. I want you to be protected, and I wrote this report for you. My name is Shelly Leeke, and I have represented victims of car wrecks from across South Carolina and throughout the southeast for nearly a decade. My law firm focuses its practice on accident and injury cases. We battle insurance companies every day, and we are aware of the myths and tricks they use to take advantage of consumers. My goal is to educate the public so they are protected against insurance companies.

7 Back To Basics: Terms You Must Know What is Insurance? Insurance is a contract between you and the insurance company. In exchange for paying insurance premiums, the insurance company will protect you according to the insurance coverage you purchased. While insurance policies are very long and confusing, the various types of coverage do not vary significantly from company to company. There are certain types of coverage that you should understand: Liability Insurance: This type of insurance covers your responsibility to someone else or someone else s property if you cause an accident that hurts someone or damages their property (car or other property). The amount of liability coverage you have will protect your assets up to the limits of the coverage you buy. If you are sued because you caused an accident, the insurance company will defend you (and hire an attorney for you if a lawsuit is filed) and pay the injured person up to the limits of the policy. In South Carolina, motorists must carry a liability policy with minimum coverage of $25,000 per person and $50,000 per accident. The minimum amount of coverage for property damage is $25,000. The liability coverage is the maximum amount of coverage available to pay for damages you cause to other person(s) or property. For example, if there were one person injured, the insurance policy would cover up to $25,000 of their lost wages, medical bills and pain and suffering. But, if there were five people injured, the coverage would have to be apportioned pro rata amongst all people injured by your negligence, up to $50,000. The same scenario applies to property damage incurred in the accident, up to $25,000. Because most people in South Carolina carry only the minimum required coverage, you should know what coverage you carry on your own policy and take appropriate steps to ensure you have additional coverage to protect you and your family. Uninsured Motorist Coverage: Uninsured Motorist Coverage (UM) provides coverage for you in the event that you are hit by an uninsured driver. If the other driver was uninsured or if you are involved in a hit and run accident, your insurance company will pay for your damages up to the limits of the UM coverage you carry. (Do not feel bad, this coverage is built in to your premiums, you pay for it!) In South Carolina, the law requires that uninsured motorist coverage up to the amount of your liability limits be placed on your policy of insurance. Should you wish to maintain only minimum uninsured motorist coverage, you must notify your insurance company within According to the latest reports from the Insurance Research Council (IRC), 1 in 10 drivers across South Carolina may be uninsured

8 twenty days (20) of the renewal or the UM coverage will be provided up to your liability coverage limits. (I do not recommend decreasing your UM coverage). Underinsured Motorist Coverage (UIM): UIM is additional coverage you may purchase to provide excess coverage in the event you are involved in an accident and the at-fault driver does not carry enough insurance to cover all of the damages. If you find yourself in this situation, and you carry UIM coverage, then your insurance company must pay for the damages caused by the at-fault driver that are in excess of the liability amount available from the other driver s insurance company. You should carry the maximum amount of UIM you can afford. Personal Injury Protection (PIP): PIP is no-fault insurance coverage that provides coverage for medical bills or economic loss you sustain in an accident, regardless of whether or not you were at fault for the accident. If you are not at fault in the accident, you may receive PIP benefits in addition to recovering damages for pain and suffering, medical bills and lost wages from the at fault insurance company. South Carolina does not require PIP to be offered to drivers, this is optional coverage that I recommend everyone purchase. What You Need to Know When Buying Car Insurance In South Carolina The truth is really quite disturbing. Most drivers in South Carolina Carry Alarmingly Low Car Insurance. BUYER BE AWARE: Many states require that motorists carry a minimum amount of automobile liability insurance. As stated previously, South Carolina law mandates that motorists carry a liability policy with minimum coverage of $25,000 per person and $50,000 per accident, and $25,000 per accident for property damage. Most people in South Carolina carry only the minimum required coverage. Even more disturbing is that there are also many uninsured motorists driving in South Carolina, which makes it even more important that you protect yourself by purchasing adequate coverage. AM I REALLY FULLY COVERED? This is the typical scenario: You just bought a car and find yourself in need of car insurance. You have seen the commercials; you have heard the jingles, and really, what could be so hard about buying car insurance? You already know that you need full coverage. You contact a local insurance agent, or perhaps you search online for car insurance rates. You may even go to an agency in person, why not, they are on your side, right? You fill out a few forms, sign on the dotted line, and you have purchased a full coverage auto policy Or Have You??

9 While you may think that your current auto policy covers fully in the event of a car accident, you should double check your current policy to make sure you do in fact have sufficient insurance coverage. You should do this before you ever need to make a claim. What I see more often than not is an individual or even a family that is under the impression that they carry full coverage auto insurance, until a negligent driver comes along and delivers the cold hard truth. In my office, a potential client may come to me after they have been injured by a negligent driver. They may have suffered debilitating injuries in the accident and their car may have been completely destroyed. They have incurred medical bills from the hospital, the ambulance, and any other doctor or medical facility that may have treated them for their injuries. The one thing most victims of auto accidents do not think they need to worry about is who will pay the mounting medical bills. Surely the other driver s insurance company will pay all the bills, right? It was their fault, they are responsible, right? Bad News May Be Coming It could very well be that the at-fault driver carried the state minimum amount of insurance coverage, or worse, they had no insurance! If you are the victim in the above scenario, you may have lost wages from being out of work, and medical bills that are mounting as you treat and recover from your injuries. The harsh reality is that you could easily have more medical bills and lost wages than the at-fault driver had in insurance coverage; and this does not even begin to account for your pain and suffering. You may not yet be too concerned at this point, because even if the other driver carried the minimum amount of coverage, you know you carry full coverage auto insurance. WHAT IS FULL COVERAGE? Full coverage is a blanket term that actually has no definition in the insurance world. Nevertheless, somehow innocent folks such as you may walk around thinking you are fully covered. This is because insurance companies make more money when they sell you the minimum amount of coverage. They lead you to believe you are fully covered if you are involved in an accident, when the truth could easily be that you may really only carry the minimum coverage required by South Carolina law to operate your vehicle. State law demands that insurance companies provide this minimum amount in their policies. Insurance companies know that offering you less coverage for your premium will save them money. The Question Most of My Client s Cannot Answer: How much Underinsured Motorist Coverage or PIP coverage did you buy from your own auto insurance company? The most common answer I hear is, What is that? I ask to see a copy of their policy, which reveals the unfortunate truth. The Insurance Company didn t bother to tell them the importance of buying the extra coverage.

10 THE COLD HARD TRUTH: If you are involved in an accident, the other driver will more than likely carry at best, the minimum state required coverage. Translated in to real words, and back to where we started when you came out with your brand new policy, what you may have bought was an insurance policy that covers only your responsibility for the other driver and passengers injuries and damages to the vehicle of the car you hit IF you caused the accident. In most cases, hopefully you are not the person who caused the accident. So, if you have an unfortunate accident such as I described above, you essentially are left with all unpaid medical bills that were not covered by the other policy. The insurance companies have no incentive to encourage you to buy underinsured motorist coverage, rental coverage, or any optional extra coverage because what do they get out of it? Insurance companies are in the market of making money. Encouraging you to pay a small amount per month to cover a large amount of extra coverage just wouldn t help them out at all. What Coverage You Need On Your Policy If You Want To Really Be Fully Covered : First, you should purchase the maximum amount of liability, UIM and UM insurance coverage you can afford, at the very minimum, 50/100/50 liability coverage. I personally recommend much more. Why would you need more coverage than the minimum? Why should you plan for other peoples injuries if you don t have enough money to pay your own bills? One important reason you should carry as much liability coverage as you can afford is because you can carry underinsured and uninsured motorist coverage UP TO your liability limits. More specifically, the more coverage you have for other people in the event you are at fault in an auto accident, the more coverage you can have for you and your family when you are not at fault and the other driver lacks sufficient coverage. Another plus is that the additional coverage is pennies on the dollar compared to the initial premium for minimum coverage, so this one is a no-brainer. Second, you should purchase at least $1, in PIP coverage, and I recommend purchasing more.

11 PIP, as I described before, is no fault coverage that pays for your medical bills or lost wages. Even if you are at fault for the accident you are still covered for medical expenses and lost wages. Third, you should make sure your policy provides for Rental Coverage. Why do you need rental coverage if the accident was not your fault? The insurance company for the atfault driver may take some time to investigate the accident before accepting liability. This may delay the process, which could leave you without a vehicle for some time. The good news is that if your policy provides for a rental, then the other insurance company can delay but you do not have to wait on a rental. When they finally accept liability and agree to pay for your car to be repaired, then your insurance company will seek reimbursement from the other insurance company for the rental cost. Fourth, make sure your policy provides Collision Coverage. I cannot stress this enough. Again, even if you are not at fault, the insurance company could take weeks or even months to accept liability. They have the right to speak with their insured before accepting liability. You should count on them having a hard time getting in touch with their insured. Collision coverage pays for damage to your vehicle when it hits or is hit by another car or object, or if the car overturns. This means that you can go ahead and have your car repaired while the other company is investigating the accident. While you may initially have to pay the deductible on your policy, once the adverse insurance company accepts liability for the accident, they will then reimburse your insurance company. In turn, your insurance company will reimburse you the deductible. You see, it all evens out, but you haven t had to deal with the hassle of sitting around without a way to the doctor, to work, to take the kids to school, etc. Being involved in an auto accident can be a devastating experience. Accidents are unexpected, and like all unexpected events, it is always best to be prepared just in case. I hope this insurance guide has proven to be a beneficial outline of what coverage you should have in place in the event the unexpected happens to you. By: Shelly Leeke, Attorney at Law