Auto & Homeowners Insurance Q&A with Edith Pearce

Part 1 – Introduction

Well good afternoon, my name is Edith Pearce. My firm is the Pearce Law Firm and we’re in Center City. Thank you for inviting me to come here today. I’m very happy to have a chance to talk to you about something that maybe seems a little bit mundane but is very important as to all of us. And what we’re going to be discussing is insurance; specifically auto insurance and homeowner’s insurance.

Most people around here drive, own a vehicle, and understand that the government requires us to have insurance. But do we really understand what it is that we’ve bought? And what I find, what I’ve found over 20 years of practice is that probably about 75% of the people that walk into my office, at all levels of sophistication, truly do not have an understanding of what they have bought for the cost of their insurance. And many times that’s because maybe one person in the family was responsible for getting it and the other person just went along with it and didn’t know. After a divorce or a death, that person many times holds onto that same policy and not have any actual idea of what is covered, if they’re protected, if they have what is appropriate for them. Many times a child will take a policy that they got when they were young and had a new car and just kept that along. And that as they get older they managed to keep that. And that may not be appropriate for them either.

There are few factors that you really need to know. And I would invite all of you to, after we’re done today, just go home and pull that policy out. Because I can’t tell you how important it is. First thing that we need to know… (We’ll bring up exhibit #2).

Part 2 – Interpreting Declaration Sheets and Policies

This is what’s called a declaration sheet. We get them. You get them every time you renew your insurance, and it tells you what your coverages are. Now, many times in today’s world people buy insurance over the Internet. Or maybe, again like I said, had a policy that has been carried on for years. The government in Pennsylvania requires us to have automobile insurance. But the only thing that the government requires are the things that truly protect the government interest, which is not necessarily protecting your interests. The government is interested in making sure that you have bought sufficient coverage, should you cause a problem for somebody else. The government does not have an interest in making sure that you have protected yourself. What the government requires is a very minimal amount of coverage for what we call bodily injury. Which again would be, if you cause an accident covering somebody else; that you were the cause.

And this is what we’re seeing right here it says “Bodily Injury.” And this is a real policy and I brought a few different ones because they all look a little bit different. And this one have $100; $300. A lot of times insurance agents will say, “Okay, well you’ve got $100 or $300. You’ve got $10k in medical expenses then you’ve got this, that and another thing and your head is spinning. It’s like so what does all of us actually mean?

What this means is that this policy has $100,000 if you cause an accident for somebody else, that covers you up to that point; up to a value of $100,000 for any one person who was injured. If you cause an accident that caused a car of four people to be injured the total maximum for that entire vehicle, for anybody in there, would be three hundred. And what they don’t tell you is, anything after that becomes your personal responsibility.

The cost of medical expenses: this is important to know because this is one thing the government requires you to buy that helps you. And that is, if you’re injured in an automobile accident, the government requires you to have $5,000. This policy shows $10k. $5,000 worth of medical coverage the good thing about that is, unlike what we’re seeing Obamacare with a lot of the deductibles, there are no deductibles on this. You go, and the auto insurance pays you directly. You go to the emergency room, they pay your bill. The doctors and emergency rooms have to accept a specific schedule. They can’t collect the difference from you from that percentage. Now, once the amount is used up, it becomes your responsibility, whether it be through health insurance or otherwise. But what’s good is that, should something happened to you and you need to go to the doctor or you need to go to the emergency room, you don’t have to use your health insurance and you don’t have to have a deductible. Which is why $10,000 is a good idea. The government only requires five.

So one thing you always want to check is double check on that $5,000 gets used up pretty quickly in today’s world. So you want to look at your policy and you want to make sure that you’ve protected yourself for really at least $10k.

The next thing that we on the policy is the cost of funeral expenses, which are sort of self explanatory. And then we see something called uninsured motorist coverage and below that underinsured motorist coverage. And I don’t know that anybody in the room really understand exactly what that is. Few people do and I have so many people walk into my office and say they really didn’t understand what this is. What this is, is coverage that you buy to protect yourself. The government does not require ‘it. Many people do not have it because they see it as a small dollar line of savings. But once I explain to you what it is you might understand why you really need to have it.

Uninsured motorist coverage: that comes into play if somebody else causes the accident and you are the one that’s hurt. You have bought protection for yourself in case that person had their policy lapse or that person forgot to buy their policy or that person never bought a policy. You have now protected yourself.

Underinsured is very similar. Let’s say the person who caused the accident only bought what the government requires; a minimum which is $15,000 in Pennsylvania. And that, should someone be hurt, can really be used up very very quickly. In today’s world if you go to the emergency room and you go to physical therapy and you have out of pocket expenses and things along that nature, $15,000 goes very, very quickly. And we’re not even talking about the price of compensation to you for your injury. We’re just talking about the amount of expenses that can come very, very quickly in today’s world. And underinsured motorist coverage is very important for you to have. Now let me show you something that we see very very regularly…

Part 3 – Your Rights and Equal Coverage

Because the government only has an interest in protecting the things that it sees that are necessary, which is protecting other citizens against what you might do. Thats the general protection that the government sees. That’s why they make certain mandates and certain requirements. So the government allows you to sign away your own rights. An insurance company is required to provide to you the same amount of coverage to yourself as you would buy for somebody else. So if you’re concerned and you brought up an automobile policy, in this instance at a cost of $100,000/$300,000 just like we saw before, the insurance company is required by the government to offer you equal coverage to protect yourself. Many times it’s not explained that way.

And what this person did here was buy coverage (if you look at the uninsured and underinsured a $15,000/$30,000 for themselves). So in fact, what this person did unknowingly was buy less insurance for themselves than they bought for everybody else in the world. And these situations arise often. I can’t say how many times my office someone comes in and they said, “Well I would never have bought less coverage for myself that I bought for everybody else in the world. If someone would have explained it to me like that.” So it’s very important to understand that when you’re looking at this, its not just making sure that you’ve got what’s required, but that you’ve got what you need for you. And so this is one unfortunate situation that we see very regularly.

Part 4 – What Happens in an Accident

Now let’s talk a little bit about what happens in an automobile accident sometimes. Sometimes, unfortunately, somebody is injured. You hope not. You cross your fingers. Accidents happen a lot. Bad weather happens. People are not paying attention. God forbid, they’re texting. How many times have you pulled up to a traffic light and looked over and you see the other person’s got their head down? How many times have you been driving on a road, a double highway, where the see the person is not really quite staying in their lanes, you go by, you look, and they’re not even looking? We’re seeing more and more of what we call “distracted drivers,” and injuries arising from distracted drivers. They’re increasing exponentially. And the unfortunate thing is no matter how careful and see you are as a driver yourself, you can’t control what somebody else may or may not be doing. And you want to make sure that you bought enough coverage to protect yourself.

Part 5 – Full Coverage vs Full Tort & Limited Tort

And there’s another thing we have in Pennsylvania, which again often does not get explained, which is the difference between what’s considered “full coverage” and “full tort.” Has anybody ever heard those words before? A lot of times the advertisements from insurance companies say, “We give you full coverage. We’ll make sure you have full coverage.” Full coverage simply means that you’re complying with what the government requirements are. That’s all that full coverage means. And I can’t tell you, and it a breaks my heart every single time, their like, “But I asked. They said it was full coverage and they said it was full coverage.” They said full coverage, but the difference is full tort. There’s full tort and then there’s limited tort. And it’s really a very important thing to understand. In limited tort, that is when you are signing away your own rights to bring a claim if you get injured, should a judge or standing case law make a decision that your injury is not serious.

There are other exceptions too. For instance, if you’re a pedestrian and I’ll go over those other exceptions. But when you select limit tort, what you have done, is you have waived rights. The rights that the government said that you can’t waive without signing. But you have waived your own rights. And what does that actually mean?

I see a lot of people come into my office. And many people have had an accident and maybe it didn’t happen right away. It might have happened nine months ago, a year ago, eighteen months ago and they truly, truly thought they were going to get better. They believed it, they wanted it, they worked at it and they thought they were going to get better. And then they come to me a year later and say, “I wasn’t going to do anything. That’s not my style. That’s not what I do. But you know what? This has really changed my life and I’m not getting better or I’m not where I was. And my doctors are telling me I’m not going to get back to where I was.” I mean, an unfortunate thing that I see many times is that happens with a lot of older folks. Our bodies are a little more frail as we get older, a little more susceptible to injury, and a little less likely to bounce back quickly.

So what does that mean in terms of limited tour versus full tort. Full tort is a misnomer. Full tort just means that you’ve retained all of your rights to do whatever you choose. That’s all that means. All that means is you’re not waiving anything, you’re not giving anything up. You are retaining all of your own choices; that’s what full tort means. What limited tort means is that you are saying that, “I am going to put in the hands of somebody else to determine whether or not I have the right to bring a lawsuit. Not me, but you. I’m putting it in the hands of somebody else.” And ultimately what that means is you’re putting it in the hands of another insurance company to look at you and say, “Well you know, I don’t think I don’t think that injury is serious. The fact that you can’t play the piano the way you used to and that’s what you enjoy, I don’t think that serious. The fact that you can’t care for your grandchild the way you had been caring for your grandchild, I don’t think that serious. The fact that you can’t lift a child anymore or you can’t reach overhead to get pots and pans or the fact that you can’t do your gardening, I don’t think that’s serious.” You’re putting that in the hands of somebody else. If you lose time from work there’s no doubt that that would be part of a claim. It’s when you have ongoing pain and ongoing problems. That fact to whether or not you gave away your rights comes into play. So what we want to look at is, what do we see on our coverage.

And what does it mean to have full tort versus limited tort. Now this is a minimal policy. This only has the very bare minimum that is required by law. And where you’ll see right on here it says limited tort. And if you’ve selected that on your policy those words need to be written on there. It means you signed a waiver and the words are right on your policy.

[audience question] Does it cost you money to have full tort?

[Edith] There is a difference. The question you need to ask you what you should ask your insurance company is what is difference? Most people have found that the difference is $20, $30, $40 maybe $120 for maybe a month or a year. Sometimes some policies only be $200 a year difference. It can be very, very minimal. It depends on what your coverages are, depends on the insurance company, depends on if you have more than one policy with the insurance company, it depends on a lot of different factors. But many times it could be as much as $1,000 difference for some people, depending on what the coverages are. But when you look at the comparisons, it’s something that you want to be educated about before you waive your rights. And I’m not suggesting that you can’t make that choice. What I’m suggesting is that you want to make it an educated choice. And you want to inquire and understand what’s best for you as you grow older and as you reach different stages in your life as to what will or will not be a factor for you. Everybody is different. People make different choices. And the choice is fine. To have the choice is important. But you need to understand the choice that you’re making.

And it will cost more. There is no doubt. There’s an incentive to not sell that, which is obvious. But there’s also an incentive to habit, to protect yourself. Because again as I see as people get older we see more and more of the persistent problems. For instance a back injury or a neck injury that really prevents you from doing things the way you have done them the whole life; in a way you have been doing them. Those kinds of injuries are often the ones that are succumb to that exact factor where people come in and say, “But I never thought that this would be a problem. This is serious to me.” But it’s not necessarily what serious to you. It’s serious as the law defines it. And so my purpose here is to explain that you have rights and you need to understand what they are.

[audience question] Would you recommend that someone taking out an insurance policy see an attorney or let the attorney read through it? I don’t think that in this day and world, you could depend on your insurance agent because he’s only interested in selling a policy. Another question, if you have everything perfect, complete coverage and protection in our policies, what would you estimate it would cost, percentage wise, over what we’re paying?

The insurance companies are required to give you the comparison. If you asked for it, they are absolutely required to give you the comparative numbers. Most of the comparative numbers that I’ve seen are within a few hundred dollars of each other. Very rarely is it outside of it for our annual policy. Very rarely is it outside of somewhere between two and eight hundred dollars a year. It really depends on the person, and their driving history, having other policies, there are so many different factors; where they live, how many cars, a lot of different factors. Rarely is it outside that range though, rarely. And I would say, if you have somebody (I always make an offer to anybody), if you have a policy and you want me to look at it, contact me. I’ll be happy to let you know whether what kind of coverage you have. Just so you can understand it; to make the choice of whether that’s what you want or whether you want to change it. My whole purpose is education. To make sure everybody understands. Because, when I see people come in and they don’t understand… That’s the shame of it all because the opportunity is there to understand. So yes, but if you contact your insurance agent, they are absolutely, positively required to show you the comparison when you ask. They are required to.

Let’s talk about what is a serious injury and what is limited tout and what is full tort. Because again these are words that lawyers use, the words that insurance companies use, and not words that the average person uses on a day to day basis. There are certain exceptions when you would, even if you selected limit tort, you would never be required to be held to that standard. If you were hit by a drunk driver, of course, assuming the drunk driver was convicted. If they were just written up where nothing ever happened, or they were drunk and everybody knew they were drunk and there was no prosecution of any sort, then it wouldn’t be. But if you’re hit by a drunk driver, by statute, limited tort does not apply. If you’re hit by an out-of-state driver, then limited tort would not apply. There are a few other exceptions. If you are a pedestrian walking across the street and get hit by car, believe it not, your own insurance covers you for that. I didn’t know that a lot of people didn’t know that. If you’re crossing a street and a car hits you, the coverages that you purchased here, cover you. If that person didn’t have insurance, you’re uninsured motorist coverage would cover you because you’re a pedestrian, you have bought that insurance. But you would not be limited tort. Motorcycles (which I’m not sure how many people here are riding motorcycles) but that’s a different story. And an intentional act where somebody would cause an injury on purpose with the vehicle, that also is outside the realm.

Part 6 – Crossing State Lines

One thing that we need to understand also when we’re talking about our automobile insurance and about full tort and limited tort is exactly when would that apply and where does it apply. One thing I also see a lot of people are not aware of, is how the laws change when you cross state lines. Many people in this room drive in New Jersey. Now New Jersey auto insurance is altogether the same and altogether a different animal. So we’re not going to talk about that because I don’t think we have new Jersey residents here. But I assume that we have a number of people who regularly drive in New Jersey. So there are just a couple things to know; just to have in your mind just to be educated. One thing to know about driving in New Jersey is that, if you have selected full tort and you drive in New Jersey, and your insurance company writes insurance in New Jersey, you’ll be considered their limited tort, because that’s how powerful they are in New Jersey. That also lets you know, I think, how important it is to the insurance companies to have you be limited tort.

Another thing about New Jersey which is different is that they have a different way of covering medical bills. Where they do, do deductions. They do, do co-pays, unlike in Pennsylvania. But what people don’t know is that you have a choice. Since you wrote, got your policy in Pennsylvania, if you had a New Jersey accident, you just have to tell them, “I want this done under Pennsylvania law,” and they have to do it. But again this is something that people are presented with. There are reasons that you may choose to have it under New Jersey. New Jersey’s top number, the amount that they will cover is $250,000. If you don’t have health insurance of any kind, that’s a good thing. If you do have health insurance of any kind, then you may not want that because you may not want to have those deductibles and use your own insurance first, and not have it on Pennsylvania insurance and not have to have deductibles. There are other nuances about New Jersey as well. But again, just for the sake of information, it’s very important for those Pennsylvania drivers, who drive regularly in New Jersey, to understand these things. Because again an informed consumer is good consumer. So always know what it is you’re buying, and what it is that you’re getting.

Part 7 – Stacking

This policy covers a lot. This has $500,000 worth of bodily injury. $100,000 worth of property damage. Of course if you take out a Mercedes or BMW in today’s world it wouldn’t be that hard to get there. $10,000 again which is what I recommend in medical expenses. And we have uninsured bodily injury, and uninsured bodily injury is equal to the liability. Which means that the policy that has been purchased for that person is equal to what they’ve purchased for everybody else in the world.

Now there’s one other thing in here where I think it’s important to understand what it means. There’s another word on here that says “stacked.” You look at uninsured motorist coverage and you see stacked right there. That means that this policy has more than one vehicle on it. What that means is that you didn’t sign your right away. Again most of these coverages that I’m talking about, where you have buy less for yourself, actually all of them, require that you have signed a waiver to give away those rights. And this is another area where you get stacked. You get your policy stacked unless you sign the waiver. And what stacked means is that this insurance, should an uninsured or underinsured (somebody who had no insurance) causes a horrific accident on the Turnpike, this person’s coverage is $500,000 stacked times the number of vehicles on the policy. So that means that they had two vehicles on that policy and a million dollars worth of coverage that they bought for themselves. Three vehicles on the policy, that’s 1.5 that they’ve bought for themselves. Again and if you look and you look at the comparisons, were talking dollars difference; very small dollars worth of difference to purchase coverage that protects you. Any questions?

[audience question] My husband changed our insurance a couple of years ago and he got an umbrella insurance. Does that just cover your house or does that cover accidents as well?

[Edith] Many times it will cover the accident as well. Most of the time it does, yes. And that’s a good thing to have. That was actually leading me right into the next thing. But let me answer this question then I’ll go right into that.

[audience question] You said that stacked is when you have more than one car. What if you only have one car?

[Edith] Then you can’t stack. You can only stack if it’s more than one car.

Part 8 – Waivers

[audience question] So you lose the ability when you don’t have the same amount as the original amount or something? What are you signing away?

[Edith] Yes. What you’re signing away is here, the uninsured motorist coverage equal to what you bought everybody else in the world is $100,000. That’s what you’re signing when you sign for the lower limits. But there’s a couple of different of what we call “waivers” when you’re giving up their rights. Yes you lose the ability to protect yourself should somebody hit you and cause an injury to you. You lose the ability to protect yourself for that certain amount of money.

Part 9 – Umbrella Insurance Policies and Injuries

[audience question] …lose the ability to sue that person?

[Edith] Yeah, because what happens is if the person is uninsured, (and this actually going to leave right into what we’re going to talk about umbrella coverage) if someone causes an accident and are uninsured, whether the policy lapsed or they didn’t have one. The first thing that your insurance company would do with regard to the damage to your own vehicle, even if your own uninsured and underinsured motorist coverage, is to determine whether or not that person had any assets. If that person has assets, then they oftentimes will go after that person to recoup money,

If you don’t have sufficient limits and the person is injured, let’s say on a highway in a bad crash a bad accident, if you don’t have sufficient coverage they can come after you for anything above your limits or if your policy is expired or for anything. So anything that would be over your limit is where your umbrella policy would come in and protect you. And again those are maybe $100-$200/year. Sometimes may be very inexpensive to have. Very rarely does anybody need them but when they need them, they need them. That’s the one thing I can tell you is when you need that policy you really need that policy. And especially, with somebody in Pennsylvania there are certain protections to be married when it comes to assets. And when somebody is a widow or widower or divorced you lose that protection of being married and the protection of your assets. So one thing, if you’ve become a widow or widower or if you become divorced, I always recommend to my clients, take a look at your policy because if you’ve got any kind of assets at all you want to make sure that your assets are protected.

[audience question] What do you mean that if you’re married, you’re protected? Does that mean they can only come for 50%?

[Edith] No, in Pennsylvania you cannot attach the assets that are spousal marriage assets. There’s different kinds of joint [assets]. But when we’re talking about spouses, the marital assets can’t individually be attached. Most of the time an accident is the result of the fault of one person not both. So your umbrella policy and your auto insurance, your own insurance first and your umbrella policy after that, would protect your assets as an individual. Because again, your marital assets can’t be attached. It’s different if its joint, like a daughter and a mother. That’s a different kind of joint.

[audience question] If you have an umbrella policy, does that help with the deductibles?

[Edith] No. Deductibles are a wholly different choice. And actually that’s one way to help control costs on a policy. And you determine what you it’s best not best for you. Again there is on the policy, we don’t really talk about the deductibles and the property damage aspect of it. But there are two different types of coverage on the property damage aspect of it. Which is, you can see here, this person has comprehensive and it has a $500 deductible. So comprehensive is where you are protecting yourself, should you cause damage to your own car. That’s what comprehensive is. Property damages if you cause damage to somebody else’s property. Now the comprehensive deductible here is $500. Some people choose to have $1000 if they have enough money in the bank account and they figure, “Well you know what better to save money on the policy. How often will I be an accident?” And how old the car is. Whether or not you even need it. A lot of times as a car gets older its value decreases in may not even be worth fixing. So that’s something, another reason why you would want to look at your policy every year as your cars change, as they get older. These are things, just to keep yourself educated as to where you are and what your coverages are. Now when we’re talking about an umbrella policy, that does cover on the auto but it’s also on your homeowners as well.

Part 10 – Homeowner’s Insurance

The homeowner’s [sheets] are always a little bit harder to read. Just how they print them out, they just always are. But again I wanted to bring you real policies rather than type it up in a way that would not
be real. Now this is a policy that also carries an umbrella policy. This has a personal liability limit amount of $500,000. And then we see med payments here for $1000 and I want to explain what those are to you, and when would your homeowners come into play.

Homeowners comes into play in a number of different ways, actually. Most often people think of an accident or something that would occur inside your home, on the property in some way, maybe on your sidewalk and this is what protects you. And then the next level of coverage after that would be if you want an umbrella policy. But what’s the $1000 medical payment? What that means, is if somebody fell down your steps; somebody slipped and fell on your sidewalk and they went to the emergency room and didn’t have insurance. Or in today’s world: went to the emergency room, had insurance, but has a deductible of some amount so therefore nothing actually got paid. They would be looking to you, potentially, for that coverage. Now this is a thousand dollars that goes for medical payment to somebody else. And it doesn’t have to be fought. So a lot of times they can make this payment and they will quell the situation down by making sure that the medical bill is paid. But that’s the limit, is one thousand dollars on this particular policy, which is very standard. Usually a thousand and sometimes up to $5,000 coverage for medical payment. Which again is good because if you own your home, you own a piece of property and something happens where somebody goes to the emergency room, it’s nice to be able to quell the situation down by getting the medical bills paid.

Something that people may not know is that sometimes homeowners’ coverage does cover. Let’s say you had a bicycle that you left outside and the bicycle got stolen. Many times the homeowners will cover that. If you had a coat that you wore out to a restaurant and it got stolen, many times the homeowner’s will cover that.

[audience question] My cousin just told us about a situation that I never thought about. They have an RV and they were in Florida. Their $500 bike was chained to the back. The chain was cut. They left her husband’s junky bike there and took the $500 bike. She was astonished that her insurance immediately paid her the money while she was still in Florida.

[Edith] That’s right. If something gets stolen out of the trunk of your car or off of your car, the insurance covers that, yes. Again a lot of people don’t even think to ask, that that may be covered. But it is. So that’s another added advantage that you have on your policy and not everybody takes advantage of it. But it’s good to know it’s there.

[audience question] Deductible?

[Edith] Depends. It depends on what you would have or what you may not have as a deductible.

[audience question] Will it pay for water damage?

[Edith] Yes and no. There’s a lot of neighborhoods here and some people have septic tanks or as we know, at least in my neighborhood, AQUA is out there re-doing the water pipes and re-doing the sewers in the older neighborhoods where the sewers are getting older. Some policies do cover it, but most of the policies require what we call a “separate endorsement” to cover that. To cover any kind of sewer backup or certain kinds of water damage. Now maybe leaking water is one thing.

[audience question] Toilet bursts?

[Edith] That’s one thing that is normally is covered under the homeowners, yes. Now, you can buy insurance to cover sewer backup and sewer break and again it’s usually very inexpensive. For those people who live in the neighborhoods where they know these things happen, it’s probably a good idea to get it. Because we all know that there are certain neighborhoods that are a little more prone to these kinds of problems. And if you have a suspicion that maybe you’re in that neighborhood, you might want to look into that and it’s a separate,
what they call an endorsement. It’s a separate part of the policy that you buy.

[audience comment] There’s also a hesitation as to inside vs outside your door.

[Edith] Yes, and that’s one thing you need to look at because again you can buy insurance through, a lot of times, through the utilities to other kinds of coverage as well. And you want to really understand from your own policy of where they are drawing the line, so to speak. But again, many times the immediate problem that you want solved, is one that is inside your house. That’s why it’s one endorsement that if you have a chance to talk to your agent, you want to ask if you’re among those neighborhoods that tends to have those kinds of problems.

[audience comment] AQUA actually sells a policy in my neighborhood. We were noticing that a lot of lawns were being dug up. And you’re responsible for the pipe from your house to the curb. And as they were being dug up my husband decided that now was the time for the policy. We signed up and the next year we had them digging up our front lawn too. So it depends on the age of your home and the age of your pipes.

[Edith] Right and every neighborhood is a little bit different. And certain neighborhoods tend to have, because of the age of the pipes, the type of soil, the amount of movement, all these kinds of factors come into play. And some neighborhoods just tend to more problems than others and it’s good to know what’s happening in your neighborhood.

[audience comment] Does the umbrella policy help to cover some auto and house that is not covered or specified?

[Edith] It is as far as a claim made against you, yes. Not for your own claim but for a claim being made against you yes. And that’s really the purpose of the umbrella policy. Really it’s to protect your own assets, protect you from a judgment, to protect you from the circumstance that most people don’t have to deal with. But like I said when you need it, you really need it. I’ve seen situations and I represent individuals (and I have for years) who got that notice from their insurer saying “You better get your own lawyer because you don’t have sufficient coverage.”

[audience question] So the amount would increase..?

[Edith] That’s right. That’s exactly right. And let me tell you there’s nothing worse than when someone get that letter in the mail from their own insurance company saying “What we sold you wasn’t good enough. You better hire your own lawyer.” And they send those out, believe me.

[audience question] Do the insurance companies sell the umbrella policies well?

[Edith] They do. Most of them do. Sometimes they recommend you go to a different company or they have an affiliated company that they sell the umbrella through but yes.

Part 11 – Degeneration

And going back to the full tort and the limited tort. As we get older, as we all know, we get a certain amount of what they call “degeneration.” In our spine, in our hands, in our joints, in our necks; and that’s natural. If you look at the medical literature, it will tell you how everybody has a certain amount of degeneration. They’ll even tell you that people have herniated discs. But they’re perfectly fine and functioning in the world. Many times what happens with an accident is that, that disc that may have been there gets worse. That disc that may have been just in the spot where it wasn’t bothering you, gets moved over just enough to the spot where it’s an excruciating amount of pain. And the difference between that full tout and limited tort, is that proving that you are suffering now and that you weren’t suffering before. When you selected limited tort, what you’ve done is you put the power in the insurance company’s hands, or other people’s hands to say whether or not this injury is serious to you. Whereas without that, it’s just a matter of determining what it is, not whether or not; there’s a difference. We see this so much with anybody who’s got any kind of pre-existing degenerative conditions. Like I said: hands, elbows, knees, backs, necks. And we all have it. I’m sure if we took one of me, I’d have it. We all do. But many times it becomes activated or aggravated from an injury and that is really the biggest location where the full tout/limited tort comes into play.

[audience comment]

Listen, if you can barely make your bills and making month to month payments is a problem, then that’s that is an appropriate place to cut. If you can not go out to dinner twice a year and pay for it… it doesn’t make any sense not to have it. And frankly that’s how I usually explain to people. I say, “Ok, how many times eating at Applebee’s is this? It looks like three Applebee’s to me.” And that’s really what it is. It’s like three Applebee’s. And if you think about it, if not going to Applebee’s three times makes it worthwhile to be well then maybe it’s something you should have.

Thanks for having me!