Insurance Basics
The following questions and answers are generally applicable, but the facts of your situation are vital to an accurate response. The facts of your case, the language of the policy, and Washington law interplay in a determination of insurance coverage.
1. Is auto insurance mandatory in Washington?
2. What are the elements of an auto insurance policy?
3. I do not carry an auto policy because I do not own a car. If I am hit on my bike, will there be coverage?
4. I do not carry an auto policy because I do not own a car. If I hit someone, and it is my fault, will there be coverage?
5. What if my bike is stolen or vandalized?
6. What are the best insurance companies in Washington?
7. What coverage is recommended?
Is auto insurance mandatory in Washington? Back to top
Yes. Washington law requires that you have a liability policy. A liability policy provides coverage for damage you cause to another’s person and/or property while driving your car. The minimum liability policy provides the following coverage:
• $25,000 per person for injuries
• $50,000 per collision for injuries
• $10,000 per collision for damage to property
What are the elements of an auto insurance policy? Back to top
1. Bodily Injury Liability
The policy pays when you are legally liable for causing bodily injury to another person. It also pays court defense costs.
2. Property Damage Liability
The policy pays when you are legally liable for causing damage to someone else’s property. It also pays court defense costs.
3. Underinsured Motorists – Bodily Injury
The policy pays for injuries you receive from an uninsured or underinsured motorist (coverage cannot be higher than Bodily Injury Liability).
4. Underinsured Motorists – Property Damage
The policy pays for damage to your property from an uninsured or underinsured motorist (coverage cannot be higher than Property Damage Liability).
5. Personal Injury Protection (PIP)
The policy pays medical expenses, income loss, and benefits for extra expenses for you, members of your household, and guests in your car in case of accidental injury or death. You must have Liability coverage to purchase PIP.
Minimum PIP coverage in Washington includes:
- Up to $10,000 for each person injured
- Up to $200 per week for lost income
- Up to $2,000 for funeral expenses
- Up to $5,000 for loss of services (ex. a driver, house cleaner, etc)
6. Collision
The policy pays for damage to your car from collision or upset regardless of fault, subject to your deductible.
7. Comprehensive
The policy pays for damage to your car other than collision or upset, subject to your deductible. This includes fire, theft, vandalism, and glass breakage.
Personal injury protection is coverage for medical and other expenses. PIP is no fault coverage, so it will provide coverage even if the collision was your fault.
I do not carry an auto policy because I do not own a car. If I am hit on my bike, will there be any coverage? Back to top
You better hope that you have health insurance or that the other driver has adequate PIP and liability limits!
I do not carry an auto policy because I do not own a car. If I hit someone (bike, pedestrian, car), and it is my fault, will there be any coverage?Back to top
This is a prime reason to have a renter/homeowner policy – for general liability coverage.
What if my bike is stolen or vandalized? Back to top
It is important to understand how your renter/homeowner policy will cover your bicycle if it is stolen, vandalized, or damaged. Talk to your insurance company. This is especially important if your bike has a high value. “Scheduling” your bike is a good way to protect it. If there is a maximum coverage amount for a single piece of property (the max is $1,000 and your bike is worth $5,000), then scheduling the bike will protect the entire value. Talk to your insurance company.
What are the best insurance companies in Washington? Back to top
Insurance companies tend to have a reputation in the legal community based on their policies and method of handling claims. You may be excited about your low premiums, but the hidden cost may be that they will put you through the wringer if you make a claim.
The American Association for Justice released a report titled “Ten Worst Insurance Companies in America” – is your insurance company on this list? Allstate is #1 for its infamous claims handling practices (read more).
What coverage is recommended?Back to top
The level of coverage will depend on the law, your personal philosophy, and your financial resources. It is easy to see an insurance policy solely in terms of “how much is it going to cost me?” When you purchase minimal coverage, you are potentially putting yourself or someone you injured in an even worse position (injuries + financial woe). Coverage for personal injuries is especially important when there is no healthcare insurance coverage. Personal financial resources are not to be overlooked, but oftentimes raising your coverage by a substantial amount will not raise your premiums significantly.