Wisconsin law requires all automobile operators to have certain types of auto insurance.
Drivers must have liability and uninsured motorist coverage (UM coverage). However, there are many other types of auto insurance available and it is important to understand what those coverages are and how they might come in to play if you are involved in a car crash. While we are not insurance agents, given the nature of our legal practice, we think it is extremely important for people to understand the available coverages and ensure they have as much coverage as possible.
Liability Coverage
There are two types of liability coverage – bodily injury liability coverage and property damage coverage. Both of these are required coverages for automobile operators to have in Wisconsin.
If you cause an accident that injures other people, bodily injury liability coverage provides a source of recovery for the injured party up to the limit of your coverage. If you are the one injured in a car crash, your attorney will want to try and understand the available bodily injury liability coverage available through the driver responsible for the crash.
Property damage liability coverage pays for damages caused to the property of others (usually a vehicle) up to the limit provided under the policy.
Uninsured Motorist Coverage
Uninsured motorist coverage (UM coverage) protects you and your passengers in case of injuries caused in a car crash by a driver who is uninsured. While Wisconsin law mandates that vehicle operators carry insurance coverage, unfortunately not everyone complies with the law. UM coverage is required by law and can be an incredibly important source of coverage if you happen to be injured by an uninsured driver.
Underinsured Motorists Coverage
Underinsured motorists coverage (UIM coverage) provides coverage to you in situations involving an underinsured motorist. Typically, policies will provide UIM coverage if the limit of UIM coverage is greater than that of the at-fault policy, and the injured party’s damages exceed the available underlying liability limit. However, most policies also have reducing clauses, which allow the insurer to reduce the stated UIM limit by the amount paid by the at-fault insurer.
Collision Coverage
Collision coverage pays for physical damage caused to your vehicle resulting from hitting another vehicle, a piece of property (for example, a telephone pole), or if your vehicle is damaged in some other way (for example, you lose control of your vehicle and it rolls over). Even if you are at fault for the collision, your insurer will pay for repairs if you have this coverage, subject to the terms of the policy. If the repairs necessary to repair your vehicle exceed the fair market value of the vehicle, the vehicle is considered “totaled” and the insurer will pay the value of the vehicle prior to the accident. Be mindful of what is required under this coverage. For example, if you have a loan on a vehicle that is greater than the fair market value of the vehicle, an insurer is not responsible for covering the difference between the replacement value and the loan. If you find yourself needing to secure a vehicle with a loan, consider gap insurance to protect you in the unfortunate situation described above.
Medical Payments Coverage
This type of coverage is considered “no fault,” meaning payments may be made for covered losses even if you were the cause of an accident. “Med Pay” coverage provides payment, up to the limit of your coverage, for medical expenses or funeral expenses following an accident. Working with an experienced attorney is important to understand how to best maximize the application of your medical payments coverage. Typically, med pay helps to cover expenses that are uninsured, meaning costs billed to or the responsibility of the injured party after other coverages have made payment.
