Auto insurance: a lawyer's perspective

Since car insurance isn't mandatory in New Hampshire, your need to carry it is even greater

New Hampshire remains one of two states in the country that does not require mandatory automobile liability insurance for all vehicles registered. This falls in with the state’s long history of “live free or die.” But not requiring it does not mean you should not have it.

In fact, since automobile insurance isn't required for all vehicles, your need to carry insurance is even greater. The reason: You or a family member may be injured seriously as the result of the acts of a non-insured driver. Unless you carry coverage, there may be no coverage to pay medical bills, to cover lost income from employment, to compensate your family member for loss of enjoyment of life, or even to replace your own car.

I recommend, first, talking to your insurance agent. Second, look at the declaration sheet that is provided to you stating your coverage limits and the cost for each item of coverage at the time of renewal.

What is your present coverage? Are you over-insured and misallocating your resources by having a very low deductible for the collision coverage, instead of having sufficient liability and uninsured motorist coverage for the same premium dollars?

Many people carry $100 or $250 deductibles for collision to their cars. That means that the carrier will pay you the reasonable value of your car, less the deductible.

Presumably, you are not going to have claims on a regular basis. Why not raise that deductible to $250 or $500 and use the savings to increase your liability coverage? Too often, we see people seriously injured after accidents who only have $25,000 or $50,000 or even $100,000 automobile liability coverage. That is not enough at a time when a single back surgery could result in medical bills in excess of $100,000.

We recommend individual coverage of at least $250,000 per person/$500,000 per accident. We also recommend if you own your own home or have any significant assets that you explore the purchase of an umbrella policy. This is a large policy — usually $1 million or $2 million in excess of your other coverages — that only comes in to play if the resulting accident has sufficient damages to use up the underlying policies.

If you have a clean driving record, an umbrella can be quite inexpensive and provide very important coverage if something catastrophic occurs, especially if someone else with little or no insurance hurts you.

What’s appropriate?

Why pay for coverage that you probably won’t use?

I recently met with a very nice man I represent. Less than a year ago, he was in a serious accident that was completely the fault of the other driver. He has incurred over $30,000 in medical bills since the accident. He has not worked, and likely will not return to work. The driver who caused the accident had a total of $100,000 of available coverage.

In reviewing my client’s policy, hoping to find additional coverage in the form of their uninsured motorist coverage, I learned that my client had precisely the same limit of coverage, $100,000.

In New Hampshire, there is an offset on your uninsured motorist coverage for the amount of the coverage of the person causing the accident. Thus, my client has no coverage to supplement the responsible person’s coverage. If either party had full coverage, the recovery for my client would be much greater.

The person causing the accident was a young man with no assets. The case likely had a value of over $250,000.

The moral of the story: Carry at least $250,000 in coverage. You do not want someone coming after your home or your assets, should you cause a serious accident, and you do not want your assets placed at risk if someone else causes significant harm to you.

What about collision/comprehensive coverage? How much is enough? If you have any loan on your car, the lienholder will require coverage on the vehicle.

The question becomes: “What is the appropriate deductible?” My answer: “What amount can you comfortably cover in the event of an accident?” If you can afford a $500 or $1,000 deductible, you will save significantly on your premiums — more than you likely think. Over the years, unless you have multiple claims, you will quickly save the money on premiums.

Talk to your agent. Find out what the cost differences are and how you can be better insured for the same amount of money. Get the coverage you need, not the coverage the carrier desires to sell you.

Also look at medical payments coverage. This is coverage for medical payments directly related to the accident. The minimum limit on a family auto policy in New Hampshire is $1,000. This coverage is provided for anyone injured in the insured vehicle, regardless of fault. We recommend a minimum of $5,000 in medical coverage. Get $10,000 if you can afford it.

Paul W. Chant, a partner in the law firm of Cooper Cargill Chant, North Conway and Berlin, specializes in personal injury, workers' compensation and medical malpractice. He can be reached at 603-356-5439 or pchant@coopercargillchant.com.