Allyson on DC Courthouse stepsProbably a lot more. How much insurance you need depends on a lot of factors. Do you have a big mortgage payment? Kids in daycare? How critical are you, financially, to your family? Do you bring home 50% of the income? Are you a stay home parent who is busy full time organizing, chauffeuring, and cooking? What would it cost to replace you?

I am gobsmacked by the effect not having enough insurance is having on one of my clients – this person is responsible, married, a solid parent, gainfully employed, owns a home, and has insurance. But the client has the absolute minimum amount of insurance allowed by law.

Let’s riff on that client's facts with a sad (hypothetical) story based on my client that illustrates what can happen when you are hurt and you don’t have enough insurance. Let’s call my client Jane. Jane is retired. Jane was in a car accident. She was rear ended at a red light. She was taken by ambulance to the emergency room and the doctors ran a bunch of tests before sending her home. Fortunately, she had no broken bones, and the bill was about $5000. Jane is a Medicare recipient and her out-of-pocket portion of the medical bills wasn’t too much.

Then Jane needed physical therapy. Her back hurt and her shoulder hurt, and for a long time, she didn’t feel better. She went back to her doctor and had an MRI, just to make sure nothing was seriously wrong. The MRI didn’t provide any answers but it cost another $2000. Her physical therapy bill was about $6000.

It took Jane two years to feel better. Two years of non-catastrophic but seriously annoying pain. Stiff necks. Trouble sleeping. Inconvenience because she was always going to physical therapy. She couldn’t go to her yoga classes anymore because it was too painful. She couldn’t sit for longer than an hour without having to get up. Drives to see her grandchildren became unbearable.

What is the monetary value of missing your grandkids and not being able to sleep? How do you put a dollar figure on Jane’s pain? I’ll tell you how I do it. I ask myself, how much would I have to be paid to go through what Jane went through? Would I live this way for $100 a day? Probably not. $500? Again, probably not.

Time for math. Jane’s medical bills were about $11,000. At $100 per day to live in chronic pain for two years, Jane’s pain, suffering, inconvenience, and loss-of-joy would be valued at $73,000. I might value Jane’s case at about $84,000. (Every case is different.)

Here is the sad part. The guy that hit Jane lived in Virginia and had the legal minimum for auto insurance, $25,000. Jane also had minimum coverage, so it didn’t offer her any extra protection. Jane also had to reimburse Medicare $11,000 for her medical bills. By the time she paid her legal expenses, there wasn't a whole lot left. Jane went through the wringer and there wasn’t enough insurance to compensate her for an accident that wasn’t her fault. Thank goodness Jane wasn't catastrophically injured. 

Let’s turn back time and pretend Jane had bough more insurance coverage. For very little more money a month, Jane could have had $100,000 in what is called uninsured motorist/underinsured motorist coverage. If she had, it would mean that no matter how much (or little) insurance the at fault party has, Jane has $100,000 in insurance. Does that mean the insurance company would have handed the full policy over? Probably not. But that is where a lawyer like me comes in!

So how much insurance do you need? In my view, no one should have less than $100,000 in insurance coverage. It is enough insurance to cover the most common injuries from the most common types of motor vehicle accidents, which are the non-catastrophic ones. 

My family has more coverage than that, and this is why. I have a mortgage to pay and three young kids. They play sports and need clothes and summer camps and are generally expensive little humans. We live in D.C., which is expensive. I want to be able to pay for my kids’ college educations. We have thought through how much money my husband and I need to have each month and each year to run our household. We have enough insurance that, god forbid, one of us is no longer able to work, that we could get by for a few years – time we would use to recover and recalibrate our lives.

Don’t be like Jane. I guarantee someone reading this doesn’t have enough insurance. I’m stunned that my very responsible client was so underinsured, and its inspired me to write this PSA. And while I’m at it – your own insurance will cover you even if you are walking or biking. I’m begging. Please review your insurance coverage! Need some help? Call me – I’m happy to walk you through it. 202-949-7109.

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