BE WARY OF SPLIT LIMIT INSURANCE COVERAGES (AND HOW THE “SPLIT” AFFECTS TREATMENT OF YOUR UNINSURED & UNDERINSURED BENEFIT)

Many auto owners are not aware the risk associated with having split limit auto insurance coverage.  The typical purchaser would see “$100,000/300,000” on their policy’s Declarations and think they have a $300,000 insurance policy. This is only somewhat correct. The number to the right of the slash (300,000) is the overall limit for each car accident. The number to the left of the slash (100,000) is the amount of coverage for each person within a given auto accident. In this example, no one individual could recover more than $100,000 for bodily injury sustained in a car accident.

Uninsured and Underinsured Motorists coverage is for YOU when YOU are injured by someone with no insurance (uninsured), or they have insurance but their limits are less than your limits (underinsured). Therefore it is important to “even up” your UM/UIM (Uninsured/Underinsured) coverage to the Liability coverage. That is, if you buy Liability coverage for $100,000/300,000 you should not leave your UM/UIM coverage at the default coverage of $15,000/30,000. This would leave you covered for only $15,000 in the event you suffer personal injury from a car without insurance. Instead, purchase UM/UIM limits to match the $100,000/300,000 of your liability coverage.

These 2 auto insurance issues could cause difficulties in the event you suffer personal injury in a car accident.

• You/your family MAY NOT BE COVERED for the same amount as your liability limits and
• You are paying a premium for the highest coverage on the right side of the “/” split policy, but you and yours are only covered by the lower amount of UM/UIM tot the left of the split or “/”.

WHAT TO DO?

• Call us and FAX your auto insurance Declaration Page(s) so that we can provide a free audit of your insurance policy.
• Check to see if your liability limits are the same as your UM/UIM limits.
• And, most importantly, consider the benefits of a combined single limit policy over split limit coverage. Note that if you maintain a combined single limit policy, your property damage limit will be combined with the bodily injury limit.

 For more information you could review the New Jersey Auto Insurance Buyer’s Guide at the link below.

http://www.state.nj.us/dobi/division_consumers/pdf/autoguide02.pdf