Consumers looking for ways to save money probably shouldn't look to their uninsured or underinsured motorists insurance.
That holds true even for those who live in the approximately 25 states with no-fault insurance laws."With today's high medical costs, if you get into a serious accident . . . there is a great likelihood that your medical costs will run to the hundreds of thousands of dollars," said Dan Kummer, spokesman for the National Association of Independent Insurers in Illinois.
"There will be related costs too, such as lost wages and other services you may need while recuperating. It could go well beyond those minimum limits and even no-fault limits in a lot of states."
No-fault insurance protection usually provides a minimum of $10,000 to $1 million, depending on the state you live in.
In states where financial responsibility laws are in effect, limits range from 10/20 to 50/100. That means the policy will pay up to $10,000 or $50,000 for a single person injured and $20,000 or $100,000 for more than one.
Paula Littwin, a Florida resident who suffered a severe trauma of the spine in an automobile accident in Broward County a few years ago, agrees.
She's all too familiar with the insurance problems a victim can encounter after an accident - even when the victim carries adequate insurance.
Littwin is unable to work or move around easily as a result of her car accident.
She said if she did not have uninsured motorist protection and an auto medical insurance rider, there would not have been enough available insurance to make a claim for her injury-related expenses.
"Uninsured and underinsured insurance not only pays motorists' medical bills, but it provides a financial umbrella to cover household assistance and other needs as a result of accidents," she said.
Health insurance does not.
Uninsured and underinsured motorist insurance are not duplications of medical coverage, Littwin said, they are complimentary to each other and motorists need both to be fully protected.
"You can't rely on the notion that the person who hits you has more than the minimum insurance," Littwin said. "And if accident victims rely on health care ... they have no means of covering the deductible or co-payments a health insurer may not be obligated to pay."
Health maintenance organizations and other health plans may also limit payments to in-plan providers, or pick up the tab for only 80 percent of what another insurer declines to pay.
"So it's penny wise and pound foolish savings when people don't have that coverage," Littwin said.
However, Kummer says, it depends on an individual's financial circumstances. In some states, uninsured and underinsured motorists protection cost as little as $30 a premium period. In other states it is very expensive.
"If you don't have a lot of money, you may not want to buy it. But if you can afford the cost, it behooves you to buy increased limits to protect your assets and yourself," Kummer said.
In today's economy, there is always the problem of downsizing industries to consider too.
"The problem is not the gaps. It arises when you suddenly lose your job and have an accident, then you could be in big trouble," said Jeanne Salvatore, spokesperson for the Insurance Information Institute in Washington, D.C.
Until last year, the institute advised motorists they could save money by dropping that coverage.