Bob Buckley: Having adequate insurance is a moral responsibility

The financial responsibility law of Missouri requires that persons operating motor vehicles must have liability insurance of at least $25,000 per person for bodily injury or death of one person, and $50,000 per accident for bodily injury to or death of two or more persons in any one accident. Any liability insurance policy must also provide coverage of at least $10,000 for destruction of property of others in one accident.  

I have been a lawyer for 32 years and those liability limits have been in place for most of my legal career. There has little effort in the legislature to increase the liability limits. Insurance companies resist any efforts to increase the limits of coverage even though they make money selling more coverage, and legislators are reluctant to increase the limits as it will increase the insurance costs of their constituents. Thus, the antiquated limits of coverage in Missouri and most other states remain in place despite the fact that wages and medical bills, components of bodily injury claims, have increased dramatically in the last 30 years.

With regard to property damage only, if the owner of the automobile has collision coverage with a deductible, the owner’s coverage will cover the cost of repairs or the fair market value of the vehicle whichever is less. The premium charged for the vehicle is based on the year and model of the vehicle, so there is protection for the driver who happens to have collision coverage. Of course, you have to pay the deductible. If you are an unlucky person who does not have collision coverage and has a vehicle that is worth more than $10,000, if a claim is made against the other driver with minimum limits of coverage, you will not be made whole. I suspect that this rarely happens.

However, in the case of bodily injury or death, the minimum limits of liability coverage are woefully inadequate in many cases. I am assisting a young man who was seriously injured in an accident. He has a job in which he earns over $50,000 per year and because of his injuries will miss months of work. He suffered a serious bone fracture that got infected and that required two hospitalizations. He has also suffered a brain injury. He has a young family and his wife is disabled and not able to work. Fortunately, he has health insurance and disability insurance that will pay him 60 percent of his earnings while he is off of work. It could be much worse.  

While meeting with the client recently, I opened an email on my trusty phone and learned the devastating news that the other driver only had $25,000 in liability coverage. Conservatively, his claim is worth several hundred thousand dollars. He could sue the responsible driver, but she does not work and she owns her home and all of her assets with her husband and so any judgment against her would be essentially uncollectible. Even if a judgment was obtained, she could discharge it in bankruptcy. Thus, my client will receive only $25,000 for these life-changing injuries.  

Yet, he will not receive $25,000 because his health insurance is through a self-insured plan and the self-insured plan has paid out much more than $25,000 in medical bills, so it will be holding its hands out for reimbursement. The disability insurance is also self-insured, so there is little hope he will receive a dime for his injuries.  

Thus, he is crippled for life, and this accident that was someone else’s fault will cost him thousands of dollars. It is unfair, but there is not much anyone can do but cry.  

At first, I was angry because there was not more insurance. The responsible driver lives in a middle class neighborhood, and I was shocked that she only had $25,000 in coverage. I suppose she and her husband did a risk analysis, which led to their low limits of coverage.  Frankly, I think we have a moral responsibility to have more than the minimum limits if we can afford it. The cost of additional limits of coverage is not significant and it guarantees that in most cases the limits of coverage will be adequate. I am getting ready to pay my annual premium for umbrella coverage, which will increase my limits even higher. I hope I never need it, but I have just in case I do something stupid and cause someone serious harm, I have adequate insurance.

My client could have purchased underinsured motorist coverage, which would have protected him, as that coverage pays up to the limits what the liability coverage of the other driver does not, but he did not have that coverage. I suspect he will buy it now, but it’s a little late. My umbrella coverage also increases my underinsured motorist coverage.

In the meantime, I hope the legislature increases the minimum limits of coverage some day. A survey of the states reveals that only three states have minimum limits of $50,000: Wisconsin, Alaska and Maine. A handful of states have limits of $30,000, and you should be very careful when traveling in Ohio ($12,500) and Arizona ($15,000).  

I hope you will examine your coverage and consider if you have enough in the event your driving error costs someone dearly. If you are purchasing more insurance, you might get some underinsured motorist coverage because most drivers out there only have $25,000 in coverage. Increasing your uninsured motorist coverage is probably a good idea too because of all of those uninsured motorists on the road.  The odds are with you that you will never need to use it, but it sure is nice to have it when you need it.