Oddly, over the past few days I’ve been a party to many conversations regarding insurance coverage. Usually the statement is, "I have comprehensive insurance".

There’s a general misconception among people that when they purchase comprehensive automobile insurance, they’re purchasing comprehensive insurance. A large number of people, especially younger car owners, are unaware that "comprehensive" in your agent’s interpretation usually means state minimums. In Oklahoma, state minimum coverage is $25,000/$50,000/$25,000. Further, state minimums usually only includes coverage for another driver and property damage to your vehicle. Most of the time, these protections serve to compensate the lienholder on your vehicle and another injured party. Most likely, you won’t see a dime of this "comprehensive" coverage.

So, what should you do? I have some suggestions here, but I’ll reiterate them now:

1. Add medical payments to your policy. What is this?: "med pay" is an agreement between you and the insurance company that is separate from your auto policy to pay for your medical bills. GET IT NOW!!! GET AS MUCH AS YOU CAN AFFORD!!!
2. Add/increase your uninsured/underinsured motorist coverage ($100k/$300k or more would be great). What is this?: UIM coverage steps in to fill deficiencies in the other party’s insurance coverage. GET IT NOW!!! GET AS MUCH AS YOU CAN AFFORD!!!
3. Add gap insurance. What is this?: gap insurance covers the "gap" between the actual value of your vehicle, and the amount you owe the bank. There is a good chance you’re not going to have enough money to purchase a replacement vehicle and continue paying on your old one.

If you’ll add these three things to your automobile policy, you can truly say you have comprehensive insurance.

Finally, a note regarding my earlier post: I had recommended liability coverage in the amount of $100,000. I’m going to revise this slightly, in lieu of a recent experience. Might I suggest liability coverage in the amount of $50,000/$100,000/$50,000, or heaven forbid, "state minimums."

My reasoning is this this: quite often by having more insurance money available to "compensate" the victim, the higher amount only encourages litigation, rather than compensation. In severe accidents with significant injuries, the medical expenses will greatly exceed the amount of insurance coverage (assuming state minimum coverage).

Having a higher amount will only encourage the insurance company to refuse or deny payment (higher policy = more insurance money = less profit for insurance company), requiring the individual to hire an attorney, resulting in less money to the injured person. Obviously the lower the amount, the less risk involved for the insurance company, and the less likely the insurance company will be to fight over the amount.

Additionally, if you’ve added the "comprehensive" amounts I discussed, you’re going to be fine if the other party is "deficient."