Friday, October 21, 2011

What Auto Coverage Do You REALLY Have if You're Injured While Driving A Company Car?

If you are driving a company car, you may have NO uninsured or underinsured insurance coverage (known as "UM/UIM") to protect you and your family if you're involved in a serious crash. This can happen even if you're told by your employer that your company car has "full coverage." Here’s what can happen and what you need to know in order to avoid a “no coverage” gap.

The scenario: You were told by someone in your company that the company car has “full coverage.” Or, perhaps you simply assumed it. Months or years later, you are seriously injured in a crash by an uninsured motorist (no liability coverage) or an underinsured motorist (someone with low liability limits). You miss months or years of work, or worse yet can't return to your job because of your injuries.

You come to learn that your “full coverage” on the company car did not include uninsured/underinsured motorists coverage because your company declined the coverage (perfectly legal in Ohio and other states). Problem: nobody ever explained that to you before the crash...

If you were injured on the job, workers compensation laws MIGHT cover your bills and a portion of your lost wages. But what about compensation for the rest of your wages, and your permanent injuries? Worse yet, what if you weren't on the job at the time of the crash?

How do you avoid huge monetary losses and possibly bankruptcy over a collision that was not your fault while driving a car you were told had "full coverage?" There are basically two things you can do to find out whether your employer has purchased any UM/UIM coverage at all, or enough to protect you. First, ask your HR department or someone in charge of insurance matters: “Is there UM/UIM coverage on my car and what is the amount of coverage?” Ask to see a copy of the “Declarations Sheet” for your car. But what if you are not comfortable asking this for fear of “making waves?” There is still something you can do.

Ask your personal auto agent who insures your family vehicle(s) about purchasing “Drive Other Car” coverage. This coverage basically covers you for other autos that you drive that you do not own. You may ask: “Why doesn't MY auto insurance cover me when I drive another car?”

Welcome to the world of more fine print “exclusions” in your policy. Buried in your policy is probably a “non-covered auto” exclusion. It basically says that your auto policy does not cover you when you drive another vehicle you do not own when it is made “available for your regular use.” And if your company car is “made available for your regular use,” bingo – the exclusion applies, and you’ve now got no coverage.

Here's the beauty of asking your agent about purchasing “drive other car” coverage. He or she will be able to find out from your employer whether your company car has UM/UIM coverage as a means of determining whether you even need to purchase this coverage.

These simple steps will close this potential “no coverage” gap on your company car.

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