Insurance and Car Accidents…How does it all work?

Insurance and Car Accidents…How does it all work?

I find that most people have no idea how the insurance works when they have been in a car accident.  Sometimes this happens because their agent doesn’t explain it and sometimes it happens because insurance adjuster doesn’t want you to use any of your benefits.  I will explain the main components of how insurance works and some of the common terms and what they mean.


PIP (personal injury protection).  Everyone that has car insurance in Utah has PIP.  This is something that is required by law and you CANNOT opt out of PIP.  This is what covers your initial medical bills.  The minimum that you have is $3,000.  If you are in an accident, regardless of who is at fault, your PIP pays your medical bills up to whatever the limit is.   If the accident wasn’t your fault and the treatment you get goes over the $3,000 then the person that hit, has benefits on their policy that protect you.  Also, anyone that is in the vehicle during the accident get’s $3,000 or whatever the PIP limit is to go toward medical treatment.  If you use your PIP benefit, it does NOT increase your premium.  Your premium is affected by things like traffic tickets or if the accident was your fault.


Bodily Injury.  Everyone that has insurance in Utah has bodily injury.  This is what pays for the injuries of the person that is not at fault.  If you get rear ended and use all your $3,000 PIP and have $1,000 additional medical, then the bodily injury component of the other persons policy pays that amount.  Plus, it will compensate you for other losses due to the injury.  The minimum in Utah for bodily injury is $25,000.


UIM or Under insured/un-insured coverage.  This benefit is NOT mandatory.  However, you should NEVER EVER opt out of this coverage.  This is really important coverage!  If you are in a car accident that is NOT your fault and your medical bills exceed the PIP limit and the person that hit you either wasn’t insured or they didn’t have enough insurance coverage available to cover your medical costs and losses associated with your injury, then your under-insured or un-insured coverage steps in to protect you.  If you have UIM on your policy the minimum coverage is $25,000.


Household services.  This is a benefit that most have on their policy.  This pays you directly $20 per day.  This is paid only if you are unable to perform normal household duties such as vacuuming, laundry, dishes, cleaning etc.  You must have a physician’s not to get this service.


Lost wages.  This is also a benefit on your insurance that most people have.  This reimburses you a certain percentage of your income when you are unable to work.  This requires a physician’s note and verification of employment and past pay stubs.


Lastly, I do have a recommendation as far as limits for your car insurance.  Below is what I recommend.


PIP $5,000-$10,000

Bodily Injury $50,000+

UIM $50,000+


If you are unsure what your limits are call your insurance agent.  If they are not where they need to be then get it adjusted to where it needs to be.  The extra cost is more then worth it!!!  I have seen too many people not get what they needed because they didn’t have the coverage they should have had.  If you have questions about insurance, we have a great network of agents that can help get you a quote or make sure you are appropriately covered, call us 801-492-9300.  If you or someone you know has bee in a car accident call our office immediately and get checked out call 801-492-9300 to schedule.

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