Q.  How much auto insurance coverage should I have?

A.  Delaware law requires that each moor vehicle insurance policy contain coverage of at least $15,000 per person/$30,000 per accident for liability personal injury protection (no-fault), and uninsured motor vehicle coverage.  It is highly recommended, however, that you purchase motor vehicle insurance in excess of the required minimum.  Most people should carry at least $100,000 of coverage for liability, personal injury protection and uninsured motorist.  In addition, you should purchase comprehensive and collision insurance to protect you against property damage to your motor vehicle.  It is not recommended that you buy comprehensive and collision insurance in a specific amount.  You should ask your agent to cover you for what is known as "ACV", or actual cash value.  This means that the coverage you carry will be limited to the actual cash value of your motor vehicle at the time it is involved in an accident.  In theory, your car should decrease in value over the years and, therefore, the amount of insurance coverage will decrease.  There should be a corresponding decrease in premiums as your actual cash value decreases.

Big, bigger mistakes

Q.  What are some of the biggest mistakes consumers make in buying auto insurance?

A.  One of the biggest mistakes is not buying enough insurance.  An even bigger mistake is not buying automobile insurance at all.  Delaware imposes severe penalties for not maintaining automobile insurance.  For a first offense, the minimum penalty is $1,500.00, plus loss of driving privileges for six months.  Another common but less serious mistake is buying a policy with too high a deductible.  Some people, in an effort to lower their insurance premiums, will buy minimum no-fault coverage with a $5,000 or $10,000 deductible for medical bills or lost wages.  This means they are liable to pay these damages before their insurance company is obligated to do so.

Firm is foot-dragging

Q.  My son was recently involved in an automobile accident that was not his fault.  The other driver was uninsured but he was driving another person's vehicle that was insured.  I have a $1,000 deductible so I am asking the other car insurance company to pay the damage to my car.  They are dragging their feet.  What rights do I have?

A.  Under Delaware law, the insurance company of the owner of the car has a reasonable amount of time to conduct a factual investigation before paying the claim.  They are probably seeking to determine whether the car was driven with the permission of the owner.  Although there is not a specific limit on the amount of time to investigate, if the company does not pay promptly, you may complain to the Insurance Commissioner's office at (800) 282-8611.  Further, you have the right to file a lawsuit against the at-fault driver for your damages.

As another alternative, you may want to have your own insurance company pay for the damage, requiring you to pay the deductible.  Your company would then seek to be reimbursed for the claim against the at-fault insurance company.  They will also seek a return of your deductible payment.

Parental liability for teens

Q.  Can a parent be legally liable for damages if his or her teen-age child is involved in an auto accident?

A.  Any adult who signs a driver's license application on behalf of a minor under the age of 18 years of age is liable along with the minor for any damages resulting from the minor's negligence.  Even if the adult parent and/or guardian did not sign the application, they may still be responsible for as much as $5,000 in property damage if the teen-ager damages property through "reckless" conduct.  If you have a teen-age driver in your house, it is important that you notify your insurance company and make arrangements to have appropriate coverage for both the child and yourself.

Update on State Farm suit

Q.  What is going on with the State Farm auto parts litigation, and how can I find out more information?

A.  On Oct. 4, 2001 in a class action lawsuit pending in Illinois, a jury awarded $456 million against State Farm for failing to perform its obligation under its contract.  Additionally, $139 million was awarded as punitive damages to discourage future bad conduct of State Farm.  The jury found that State Farm engaged in consumer fraud and deceptive business practices by specifying the use of cheaper and less reliable auto body parts in their repair of motor vehicles.  The class period for recovery for consumers starts on July 28, 1987 and ends on Feb. 23, 1998. 

Conflict of interest

Q.  Last weekend, my car was rear-ended by another driver who has the same company as I have.  Is there a conflict of interest?  I was injured in this collision and the company wants me to give a statement.  What rights do I have?

A.  Under Delaware law, you have a claim against your insurance company for payment of reasonable and necessary medical bills and the net amount of lost wages.  You also have a claim against the driver's insurance company for your pain and suffering.  Unless you give permission to the company, there should be two adjusters assigned to this claim and they should keep the files separated during the claims process.  It is often not a good idea to give a statement to the insurance carrier.  The information secured from this statement is often used against the consumer at a later time.  You should seek legal counsel to help guide you through the claims settlement process.

 

The information on this website is offered for general informational or educational purposes and does not constitute legal advice. It is our intention to keep the materials current but there is no guarantee they are up to date. Do not act or rely upon the information without seeking the advice of an attorney. Contact through this website does not create and attorney-client relationship. Our firm practices and is licensed in the following states: DE and PA.