Protecting your family car with insurance

Jim Murphy of Murphy, Gillick & Wicht Prachthauser

October 8/2003

Our firm recommends that all drivers have bodily injury liability insurance, underinsured motorist coverage and uninsured motorist coverage with limits of at least $100,000 per person and $300,000 per accident. (“100/300”).

Protecting Your Family with Car Insurance

Why is car insurance important?

Serious and disabling car accidents are common. In just one year, 1996, more than 66,000 persons were reported injured in Wisconsin motor vehicle accidents and, on average, two people were killed each day. A significant injury can result in substantial medical expenses, lost wages, pain, suffering and permanent disability or disfigurement. Since the driver responsible for a car accident could be someone in your household, someone who has low insurance limits, or someone who is not insured, ample insurance coverage is the best way to protect your family from being financially devastated by a personal injury caused by a car accident. Our firm recommends that all drivers have bodily injury liability insurance, underinsured motorist coverage and uninsured motorist coverage with limits of at least $100,000 per person and $300,000 per accident (“100/300”). If higher limits are feasible, then these should be considered because limits may often be raised substantially with only a minimal increase in premium. For example, Wisconsin’s Commissioner of Insurance notes that increasing limits five times, from 50/100 to 250/500, increases premiums only 22%.

How do I safeguard my assets?

Buying Bodily Injury Liability insurance protects your assets when you, a family member living with you, or a person using your car with your permission unintentionally or negligently causes a car accident injuring someone else. Such insurance covers you from that person’s claim up to the stated amount of your limits and compensates that person for his or her related medical expenses, lost wages, pain, suffering and permanent disability or disfigurement. You are responsible for any amounts exceeding your limits.

What protects my family from drivers who don’t have car insurance?

Uninsured Motorist (“UM”) coverage is insurance that you buy in order to protect yourself and occupants of your car when struck by a driver with no insurance or a hit-and-run driver. It would also apply if you were injured as a pedestrian struck by such a driver. Such coverage ensures that money is available to pay for losses caused by someone else’s negligence – someone who was already so negligent that they failed to obey the law. Underinsured Motorist (“UIM”) coverage is meant to protect you and the people in your car by applying to injuries caused by drivers who do not have sufficient insurance. In Wisconsin, the minimum amount of bodily injury liability coverage required is $25,000 per person and $50,000 per accident (“25/50”). But because an average five-day hospital stay can cost more than $10,000, such coverage is often wholly insufficient to pay for the medical expenses, lost wages, and pain, suffering and permanent disability or disfigurement which are incurred. Underinsured coverage increases the amount of insurance available to you and the people in your car up to the amount of coverage you buy.

What if I want a substantial amount of insurance?

Through homeowner’s insurance, you are often given the option to purchase an “umbrella” policy or excess coverage, which gives added protection above the limits of your car insurance. For someone who has substantial assets, like a home, retirement funds or savings, this type of policy protects those assets up to the stated limits. Significantly, these policies may allow you to add the umbrella to youruninsured and underinsured motorist coverage.

Thus, for example, if you bought an umbrella policy with a $1,000,000 limit and had it apply to your uninsured motorist coverage, you would be protected when a driver with little or no insurance caused you catastrophic injury, such as paralysis, loss of a limb, or burns. Keep in mind that all insurance policies are different and should be read carefully and discussed with the insurer’s agent.

Moms Honored for Changing Wisconsin Law

This past summer Don Prachthauser, President of the Wisconsin Academy of Trial Lawyers, honored two mothers who struggled against powerful business interests to effect an important change in Wisconsin law.

After the untimely deaths of their two children, the Mothers, Patty Millar and Barbara Schultz, discovered that Wisconsin law restricted the amount of damages recoverable for wrongful death. Under the law, damages were limited to a maximum recovery of $150,000 for the loss of a child or spouse’s “society and companionship,” e.g., his or her love, affection, care, protection, and guidance. Recognizing the unfairness of such an arbitrary limit, the mothers began a grassroots effort that increased public awareness, gained attention from media, and eventually reached Wisconsin legislators even though, as Don Prachthauser noted, “All the experts said that this couldn’t be done. It would be impossible given the current political environment. “As a direct result of the Mothers’ efforts, the “Justin/Lindsey” bill was passed. Under the new law, parents may recover up to $500,000 for the loss of a child’s society and companionship and individuals recover up to $350,000 for the loss of a spouse’s society and companionship. Although the Mothers object to laws that abolish a jury’s right to determine damages, the legislation is a victory for families who lose loved ones as a result of another’s negligence. Law’s Effect on Insurance Wisconsin State Journal noted that Wisconsin insurers, which opposed the new law, have used the change as a selling tool to urge customers to boost car insurance coverage. Though we encourage all drivers to examine their insurance coverage, the fact is that non-fatal injuries “are far more common, and often costlier, than fatal crashes.”

Murphy Lawyers in the Community

Jim Murphy recently addressed developments in product liability litigation involving defective seat belts and air bags before the Wisconsin Academy of Trial Lawyers’ Annual Seminar in Door County.

In October, Don Prachthauser spoke to University of Wisconsin law students at a Career Forum about their professional options. He was also newly appointed to the Board of Directors of Young Life and Chairman of the Gethsemane United Methodist

Administrative Council. Melita Biese is serving as Program Chair for the Wisconsin Academy of Trial Lawyers and a Parish Trustee for St. Bernard’s Church in Wauwatosa. She was also elected to the Litigation Committee for the Wisconsin State Bar.

This summer, Kevin Kukor spoke at the Wisconsin State Bar Convention on cross-examination of experts. Kevin is serving a third year as Athletic Director at St. Mary’s Parish school in Hales Corners.

Keith Stachowiak is on a committee developing guidelines for the St. Gerard Fund, which will annually award about $60,000 in scholarships for grade school students. He is also serving a third year as Athletic Director at Our Lady Queen of Peace Parish school, where he is Vice-Chair of Parish Council and Finance Committee Chair.

This past Summer, Thadd Llaurado coached girls’ baseball for the New Berlin Athletic Association, and this September he began his third year coaching Marquette University’s Mock Trial Team.

Mark Baus is active as a tutor for students at Milwaukee Public School’s Carlton School.

So-Called “No-Fault” or “Auto Choice” Insurance

A form of insurance available in a few states is labeled “no-fault” or “auto choice” insurance. Under this scheme, all drivers in an accident file claims for losses with their own insurer, regardless of who is at fault. Since insurers have apparently found this to be a profitable system, they have lobbied government to adopt it. Yet, data from the National Association of Insurance Commissioners shows that “no-fault” states have the highest average car insurance premiums and that premiums in “no-fault” states rise nearly 25% faster than states with traditional car insurance. A reason for this is because in “no-fault” states, good drivers are forced to pay for the mistakes of bad drivers. In states like Wisconsin, which have traditional insurance, the burden of high insurance premiums is put on those that have the higher risk of collision. For this and other reasons, the State of Wisconsin Office of the Commissioner of Insurance recently reported that Wisconsin continues to have among the lowest automobile insurance rates in the country.

 

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