You’ve heard of uninsured drivers — this is a story of an under-insured driver.
In June 2010, Kaitlynn Fisher was killed in a car crash when the other driver, Ronald K. Hope, ran a red light. There was no doubt as to culpability: a jury and even Hope’s insurer (Nationwide) agreed that Hope was at fault.
The story gets interesting because Fisher’s insurer, Progressive, did not want to pay out a claim. You see, Fisher carried coverage for under-insured drivers. Hope had maxed out his $25,000 in coverage, and Fisher’s policy provided up to $100,000 coverage for accidents involving uninsured and under-insured drivers. Obviously hoping to avoid paying out a $75,000 claim, Progressive interjected itself into the wrongful death lawsuit on behalf of Hope.
The ploy backfired. The story has gone viral on on the internet, creating a lot of bad publicity for Progressive. But there is a much larger problem here — one that goes way beyond the actions of an unscrupulous insurer.
The real problem is that Maryland, like most states, only requires drivers have $25,000 in insurance coverage. That is peanuts compared to the damage a driver can inflict. Wrongful death settlements are easily be in the millions of dollars. And a driver who is maimed can still be facing huge medical bills, especially where there is a permanent disability.
Imagine if drivers had to carry insurance coverage proportional to the damage they could inflict. That would drastically change their transportation choices.
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What is sought and what is awarded are vastly different. Pay-out’s in the millions is rare, and not easy. That said, I am one who owner/driver who has a million dollars in coverage to forestall a catastrophic cost that might take my house, my future income and any other assets. I am limited only by my ability to pay the premiums. Someone else might low-ball coverage because they have no assets to protect, or commensurate income. However, they need the car to hold a job. State lawmakers recognizing this reality require a minimum. This low figure should be indexed, year to year for the common good.
I have suffered only property damage due to uninsured/unlicensed drivers; so, I am somewhat familiar with the issue. More importantly, I had a friend hurt in a collision who overspent the guilty party’s insurance maximum only halfway though his initial hospital stay. His advise to me: GO FOR THE MAX!
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Reasonable minimum for auto insurance would be more in the $1,000,000 ballpark. It’s too easy to put someone on life support for the rest of their lives.
I once was hit by an uninsured driver. It would be interesting to see what would happen if they increase mandatory minimums. How many people would be priced out of cars completely?
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