AUTO INSURANCE POLICY WITH DROP DOWN OR STEP DOWN COVERAGE – MN LAWYER
Our attorneys always advise people to read their insurance policies and ask their agents a lot of questions. Here is another important reason to know what you are getting in your insurance policy:
In Minnesota, every auto insurance policy is required to have a minimum amount of liability coverage, and a minimum amount of uninsured and underinsured coverage. (Uninsured and underinsured coverage are pretty much what they sound like – if you are in an auto accident caused by another driver and that driver doesn’t have insurance or enough insurance to pay for your injuries, your uninsured or underinsured coverage will pick up the difference up to the amount of the coverage you purchased.) However, while the minimum amount of coverage for liability and uninsured and underinsured is $25,000, you can buy much more coverage. Our car accident lawyers frequently see people with coverage of $100,000 or $250,000.
The reason it is important to read your insurance policy, is that some policies have what is called a step down or drop down provision. What that means is that even though you think you have more coverage (and your insurance cover/declaration sheet says you have more coverage), in certain circumstances the car accident insurance will step down or drop down to the minimum. For example, if you are passenger in an accident caused by your family member, what you thought was $250,000 in auto insurance can drop down to $25,000. Or if you loan your car for the day to your sister or best friend, the uninsured coverage may have a drop down or step down provision so that if they are injured by an uninsured driver, your insurance will only cover them for the minimum $25,000 even though your dec sheet says much more. Our MN car accident lawyers have had many clients unpleasantly surprised by drop down coverage after they, or a family member or friend, are seriously injured in a car crash.
Discovering that your auto insurance coverage stepped down to the minimum can be a big problem if there is a serious accident with major medical bills and disability. Therefore, read your policy and ask your insurance agent questions so you know what you are getting, and are getting what you think you are getting.
If you have questions about your car insurance after you have been injured in an accident in MN (or if you are from Minnesota and are injured in an accident in another state), you are always welcome to call us and speak with a lawyer for a free consultation.