Here is how the question is usually presented to us:
- Client involved in collision, medical bills are not getting paid, can’t be seen by health care provider because does not have first party insurance and provider will not accept “third party”.
- Friends inquire what is the best auto insurance to buy.
We prefer the second scenario as it provides calm, proactive discussion and opportunity to educate the insurance purchasing consumer of their power. Sadly, the first scenario is more common and the client is operating from a disadvantaged position, requiring a lot of triage on the part of the attorney.
Let’s deal with the second scenario first. We tell friends they have the power of the dollar and with that power they should make informed decisions about auto coverage that protects them, their families and the people they care about. It is no different than going to the grocery store with your grocery budget to buy bread, milk, and eggs. Many of us decide to spend the family grocery budget based on price, service and accessibility, food, content/ingredients. Here we will focus on food content of insurance coverage as accessibility, service, and price is a topic for a separate blog. Do you want generic white wonder bread or organic whole wheat bread with flax seeds? Buying insurance for you and your family should have the same knowledgeable and thoughtful consideration, check the contents of your insurance purchase, know what you are buying is good for you and your family.
First, comply with the law and purchase third party liability coverage. Alaska law requires drivers to have a minimum of $50,000.00 per person/ $100,000.00 per collision in liability coverage. Liability coverage applies when you are the bad guy. For example, if you run a red light and collide into another vehicle and the occupants of the other vehicle are injure, there is a $50,000.00 per person and $100,000.00 for the entire collision available to cover the losses sustained by the folks harmed by your negligence.
Second, protect yourself and family with the purchase of first party medical payment and UM/UIM(uninsured/underinsured motorist) coverage. First party medical payment and UM/UIM coverage financially protects you and people you care about in the event of a collision. It provides funds to pay medical bills, lost wages and other harms, the losses up to the limits that you purchase. This is where you need to be a smart shopper and consider the needs of your family in the event of a collision. First party coverage is voluntary, not mandated by state law so insurers do not market this coverage. Additionally, first party coverage is not where insurance companies make money so selling this coverage to you is not a priority for the insurance industry. So, when shopping for first party coverage, you need to know what you are buying and why. Do not be misguided by the selling agents. In our experience, the insurance selling agents are not informed on the first party products offered by their employer.
Note: “Last-party” and “Third Party” refers to your own liability insurance that protects the victims of your negligence.