People who visit me after they’ve been a victim in a car accident are often shocked to discover that their own insurance company may be a major source of the funding for their property damage and medical bills.

It’s natural for all of us to think, “The other guy caused the accident so the other guy has to pay.”

But in Colorado, not only do we need to be defensive drivers, but we need to be defensive in the way we purchase auto insurance. Why? Other drivers often have no insurance or the bare minimum of insurance, which is $25,000. In a serious accident, that may not even come close to covering your first day in the hospital.

That is why you need to purchase the types of insurance that will help you pay for your own injuries and damages after an accident, even when the accident wasn’t your fault. In fact, here’s a well-kept secret: a lot of those personal injury ads that you see on TV – the ones hollering at you about the giant sums that attorneys were able to secure for accident victims – were only possible because the victims themselves carried good insurance. Getting money from at-fault drivers is often like getting blood from a stone: you’re never going to get it because it ain’t there. So, make sure you carry the proper insurance.

Those personal injury ads that you see on TV – the ones about the giant sums that attorneys were able secure for victims – were only possible because the victims themselves carried good insurance.

Sadly, though, just because you carry the proper insurance doesn’t mean your insurance company is going to call you up after an accident and offer you tons of money. Of course not. You have to be an educated consumer to access your coverage. You literally have to contact your own insurance company and let them know exactly which “pots” from which you deserve compensation. Otherwise, they will likely never tell you what monies you are owed and let it just slide under the radar. Believe me, I’ve seen it happen time and time again.

What are the “pots” you should have in your auto insurance? Read on…

Healthcare insurance obviously doesn’t cover your copays and deductibles, but MedPay does.

Medical Payments Coverage

First and foremost, you should have Medical Payments Coverage, or MedPay. In Colorado, insurance companies must offer this no-fault insurance coverage, which means that no matter who is at fault – you or the other driver – you can access this money to help pay your medical bills. Typically, the amount is $5,000, and the only way you don’t have this coverage is if you waived it in writing.

Here’s the tricky part: Most people don’t know they have MedPay! Or, they may not know that they waived their right to the coverage because their agent was trying to trim costs on the policy for their customer and that seemed an easy deletion. Insurance agents say, “You have health insurance, right? You don’t need MedPay!”

But that couldn’t be farther from the truth. Think of all your copays and deductibles, which could easily run into the thousands of dollars. Healthcare insurance obviously doesn’t cover your copays and deductibles, but MedPay does.

And, as I mentioned above, insurance companies typically don’t alert their own customers to the fact that they have MedPay coverage after an accident. You have to know your own insurance well enough to ask for it.

Collision coverage will not pay for any medical bills you incur, which is another reason you need MedPay.

Collision Insurance vs Liability Insurance

You also probably have collision insurance, which protects your car when it is involved in a crash with another vehicle or a stationary object. Most car crashes fall under this kind of insurance policy. The types of damages include crashing into another vehicle, another vehicle colliding with yours, or ramming into a streetlight, pole, or some other stationary object. It’ll cover the cost of repairs or replacements to your own car. Liability coverage, on the other hand, takes care of damages that you cause to other people’s property. But remember: collision coverage will not pay for any medical bills you incur, which is another reason you need MedPay.

Underinsured Motorist Coverage

Now, the mac-daddy of all types of insurance you should carry. You should always (always, always) have Underinsured Motorist Coverage (UIM) on every car that you own. UIM kicks in when you’re the victim in a car accident and the other driver doesn’t have enough coverage to pay for your bills. As I’ve said, in Colorado where the hit-and-run statistics look like an epidemic, you need UIM more than ever.

I recommend a minimum of $250,000 of UIM because it covers:

  • Medical deductibles
  • Medical bills
  • Medical co-pays
  • Pain and suffering
  • Lost wages and other economic losses

This is typically the “pot” from which those huge settlements that you see on TV come from. If you don’t have UIM, and the other driver only has $25,000 (the minimum required by the law), you will only get $25,000, which probably won’t even come close to covering your expenses.

Also note: Don’t buy one UIM policy on one vehicle and leave it off of another. You want to buy as much UIM as you can afford, so make sure you also put it on every car because you can access all UIM “pots” after an accident, no matter which car was involved.

And I have to stress one more time that, even if you carry all of these types of insurance, your insurance company probably won’t alert you to all of the “pots” that you can access after an accident. You need to advocate for yourself, or hire an attorney to do it for you.