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Car insurance is something that nearly all states require and something that all responsible drivers know they ought to have. For many drivers, their understanding of their auto insurance policy consists only of paying the premium and hoping that they never have to know what it is all about.

However, with a quick and simple translation, it is possible to read and understand your policy and with that comes a better understanding of your rights and privileges as both a driver and a consumer of auto insurance. Remember that you are paying for that policy coverage and so you want to be able to take advantage of the features and benefits for which you have paid should the need ever arise.

There are usually three general types of coverages in your insurance policy and they can be thought of as those that protect your financial resources and assets (liability insurance), those that protect you and any passengers you may have in your vehicle with you (personal injury coverage and uninsured and underinsured coverage) and those that protect your vehicles or property you damage (Property Damage and or collision coverage).

Liability insurance protects you when claims are made against you as the result of an accident. Your insurance company will provide you with an attorney and provide coverage for you up to the full extent of insurance you purchase. Personal Injury protection coverage provides payment for medical bills for injuries arising out of a car accident or one where you are injured as the resullt of a motor vehicle accident, even when you are walking on the street. Uninsured or underinsured motorist coverage options allow you to make claims against your own carrier when you are injured or suffer property damage as the result of a vehicle being driven by someone with no insurance or not enough insurance. Property damage coverage is the amount your company will pay for damage to property caused by you in an accident. Collision coverage is the coverage you purchase to get your car repaired quickly after an accident without regard to who was a at fault in the accident. All of these coverage options generally have limits on them and so it is important to know what your limit is both per person and also per accident.

There is one really important issue for drivers to know about and understand and that is the issue of Verbal or Limitation on Lawsuit Threshold. Generally, this is a way for a driver to save a little bit of money on a car insurance premium but it is important to note that while you may save money, you will also be severely limiting yourself in your ability to bring a lawsuit for injuries and this limitation will also extend to your immediate family. Generally, under the threshold, you can only collect damages for severe types of injury. Clearly, the money savings is not worth your loss of rights!

It is also your obligation to prove objective evidence (this means some sort of testing) that your injury is one of the limited types permitted under the threshold for recovery. Because most accidents do not involve such extreme injury, it means that for many drivers, there will be no recovery, no benefits and no compensation for injuries. Consider all of your options and you will see that the benefit of saving is not worth the extra obstacles that you may have to overcome in the event of an accident when you are not at fault!


Under the No Limitation on Lawsuit Option, you retain the right to sue the person who caused an auto accident for pain and suffering for any injury.

LIMITED RIGHT TO SUE — By choosing the Limitation on Lawsuit Option, you agree not to sue the person who caused an auto accident for your pain and suffering unless you sustain one of the permanent injuries listed below: (Choosing this option does not affect your ability to sue for economic damages such as medical expenses and lost wages.)

  • loss of body part
  • significant disfigurement or significant scarring
  • a displaced fracture
  • loss of a fetus
  • permanent injury (Any injury shall be considered permanent whenthe body part or organ, or both, has not healed to function normallyand will not heal to function normally with further medical treatment based on objective medical proof.)
  • death

The more you understand about your insurance coverage, the easier time you will have when you have to make a claim.

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