In difficult economic times, families cut their budgets in ways to save that result in hurting themselves in the long run. Sometimes that involves making cuts in automobile insurance coverage. Although immediately more affordable, in the long run, having less coverage can cost a family more, especially if they were to have an accident and need the assistance of auto accident lawyers. Here’s how people change their policies to save money:

Amy decided to choose the minimal coverage on her policy to include uninsured and underinsured, Parts 3 and 12 on her policy. She sustained severe injuries in an accident where the other driver had no insurance and her damages greatly exceeded her policy limits. The uninsured coverage was not enough to pay for all of her medical expenses, lost wages and pain, and suffering. Her unpaid damages have forced her to consider bankruptcy.
Bill thinks it is a good idea to select the full deductible on the Personal Injury Protection (PIP) part of the policy since he has Mass Health to cover his medical expenses. Bill sustains sprains to his neck and back and requires several weeks of physical therapy, running up a bill in excess of $8,000. When he goes to settle his claim against the other driver’s insurer, the adjustor reduces the value of the claim by the amount of the PIP deductible, $8,000. Bill has a very small chance to recover anything for his pain and suffering.
Charlie thinks he can save money on his policy by telling his insurer that the car he owns is registered in Dudley, his mother’s residence, instead of Worcester, which is where he lives. After an accident where his car is damaged, Charlie’s insurer’s denies coverage because he misrepresented his residence. He has no money to repair or replace his vehicle.
These scenarios are all too common for Personal Injury Lawyers. However, with insight, families can both protect themselves and save money at the same time under the Standard Massachusetts Auto Policy, 7th edition.

In scenario 1, Amy did not know that one of the best deals under the state auto policy is Part 3 and Part 12, uninsured and under-insured coverage. Uninsured coverage applies whenever an accident is caused by an uninsured or hit and run driver. An under-insured claim is where the responsible motorist has too little coverage to properly compensate the injured party. For around $10-$20 per month, Amy could have increased her uninsured (Part 3) and her under-insured (Part 12) coverage to provide sums of $50,000 or $100,000, for her own recovery of damages if she was injured by and uninsured or under-insured driver. In addition, any disputes with the insurer over the value of the claim are decided by arbitrators, not the Court.

Under scenario 2, the PIP deductible is probably the worst aspect of the state’s auto policy. By statute, the responsible insurer has the right to deduct the amount of the PIP deductible from any settlement or court judgment. The tiny savings from choosing the PIP deductible is not worth how it will greatly reduce the amount of any injury settlement or judgment. Choosing the tiny savings of the PIP deductible is truly being “penny wise and pound foolish.” With universal health care being in play, it seems logical to rely just on health insurance to pay medical bills instead of paying for extra coverage on an auto policy. In reality, the deductible simply isn’t worth the risk.

Charlie in scenario 3 is trying to game the system by avoiding the higher insurance rates in Worcester versus a neighboring town. Insurers, or the Division of Insurance, set the insurance rates for the cities and towns. So when a policy holder represents his or her residence on the application, the insurer bases its rates upon those representations. The insurers’ promises to provide coverage are contingent upon the accuracy of the policy holder’s representations. The law is clear: material misrepresentations to an insurer lead to a denial of coverage.

There are ways to save on your policy and protect yourself at the same time even under the state’s expensive auto policies. No one likes being involved in an accident, but with the number of drivers and vehicles on our roads, accidents are bound to happen and to avoid making a bad situation worse, make good choices in advance. When in doubt, ask your insurance agent or your local personal injury law firm about the best way to protect your family and your wallet.

Ultimately, it is no secret that personal injury lawsuits can be complex. If you are injured in a car accident and you suspect that another driver might be to blame, there is a chance that you could be entitled to compensation. Above all, researching your legal options, including how to file a claim, is therefore crucial and can ensure that you can get the best possible outcome for you from a personal and financial perspective.

By Paul J. Franco, Esquire. Personal Injury Attorney for the Law Offices of Joseph J. Cariglia, PC, and the Republican candidate for the State Senate, First Worcester District. If you have any questions or comments, send Paul an e-mail .