Uninsured Motorist and Underinsured Motorist Coverage – Do you need it?!

Liability insurance is mandatory in the state of Wisconsin– along with most other states.  If you fail to drive without liability insurance you may face fines or even jail time.  If you cause an accident, it seems logical to assume that the liable party would be responsible for damages.  Liability coverage under your automobile insurance policy is most often thought of in regards to bodily injury and property damage.  This assumption is logical – however, there is another part of the liability coverage that is rarely discussed but equally important.

According to carinsurance.org, one out of every six drivers is driving without insurance (in WI, the rate is 15%) – quite a startling statistic.  If you were hit by one of these uninsured drivers and they injured you, then you would expect them (or their insurance) to pay for the damages.  What if they don’t carry any liability insurance?    Does that mean you are on the hook for all the damages that someone else caused?  No.  Your uninsured motorist coverage under your automobile insurance provides part of this coverage for you by paying for bodily injury damages sustained by a liable, uninsured motorist.  This also prevents you from having to pay any out of pocket expenses for health care costs (unlike health insurance).

Avoid headaches during a claim by being properly insured!

What happens if the person that is liable for damages has insurance, but not enough to pay for all damages?  Your underinsured motorist coverage under your automobile insurance provides another part of this coverage for you.  This coverage provides coverage for bodily injury when the liable party does not carry high enough liability limits to provide for the damages. Although only one in every six drivers is uninsured, countless more are improperly insured and may not carry high enough limits to pay for damages sustained in an accident – particularly with the rising costs of health care.

An important note regarding uninsured and underinsured motorist coverage:  it does not pay for property damage that is caused by a liable driver (i.e. damage your vehicle); it only pays for bodily injury.  Some carriers offer uninsured motorist property damage insurance, usually at an additional cost.  If you have the option to purchase it – we certainly recommend it!  If you don’t have this coverage and you get hit by an uninsured or underinsured motorist, you’d need to carry collision coverage on your automobile for property damage coverage to apply.

Uninsured and underinsured motorist coverage is an important part of a comprehensive risk management program; therefore, it’s important that you consult with your insurance professional.  Feel free to contact us directly with any questions or concerns you may have.  As always, please read your policy forms for exact coverage.

Roof Loss Settlement – understand your coverage!

Insurance companies have been consistently increasing homeowner’s rates in the state of Wisconsin over the last year – and will continue to do so for the immediate future.  If you haven’t seen a rate increase in your home policy recently, chances are that you’ll realize one in the coming months.

One of the main reasons that insurers are increasing their homeowner’s insurances rates is due to the weather-related losses that they’ve suffered in recent years. Wisconsin has experienced heavy storm activity including wind, hail, rain, and other harsh elements.  These elements have combined to cause an excruciating amount of claims activity for insurance companies.  Luckily, the large majority of companies have responded positively and recognized the fact that this is the reason they are in business – to restore individuals and families to their condition prior to the loss.

In addition to rate increases, these losses have also affected how insurance companies are settling losses on roofs – particularly wind and hail claims.  A homeowner’s policy has two specific items that you need to be aware of:

  1. A separate wind or hail deductible
  2. An actual cash value loss settlement option on your roof

    How will your homeowners insurance policy cover damage to your roof?

These stipulations and amendments have become very common and are largely determined by:  the age of the roof, the material of the roof, the condition of the roof, the deductible on the policy, and a policy owner’s loss history.   For example, if you have a low deductible on your policy, the insurance company may mandate that you carry a higher deductible for any losses due to wind or hail since they have been both frequent and severe in our area.  Alternatively, if you have an older roof (15-20 years of age or older) or a roof that is in poor condition, the company may have the ability to mandate that the roof be settled on an actual cash value basis until the roof is either repaired or replaced.  Many insured’s choose this coverage because it may lower their premiums, but it is imperative that they understand how it affects them at the time of loss.  If you have a total loss on your roof and have the actual cash value endorsement on your policy, the insurance company will not replace your entire roof with a new one.  They will pay you the actual cash value instead, which is determined by:  taking the cost to replace your roof and deducting depreciation from that cost.  Depreciation is most commonly calculated by establishing a useful life of the roof and determining what percentage of that life remains.   Subsequently, the coverage may be cheaper but coverage is also less!

It is important to understand the difference between replacement cost and actual cash value loss settlements and how they affect the settlement at the time of loss.  Feel free to contact us for further explanation or for other measures you can take to either have a lower wind/hail deductible or get replacement cost loss settlement on your roof!  As always, read your policy forms for exact coverage.