Auto Insurance Thresholds

For so many of us, our cars are extensions of our homes and offices. We spend hours every week driving or riding along, with everything on our minds from sports to shopping, but rarely do we think about our auto insurance coverage. We all know that hundreds of car accidents happen each day, but most of us have no idea that our insurance policy may limit our ability to bring a claim for damages if we are involved in an accident. The essential question is, "What's my Threshold?"

There are two general types of auto insurance: Verbal Threshold and Zero Threshold, and the distinction is extremely important. If you are injured in an auto accident, you may have damages that are not simply bills which can be paid.  For example, you may have scarring, discomfort, pain and physical limitations. Such injuries can often have profound effects on our physical comfort and our ability to carry on our normal activities of daily life.  The threshold you have determines whether you have the right to bring a claim against the responsible party for those non-economic damages.

While the "Verbal Threshold" option is less expensive, it also offers less comprehensive coverage.  With the Verbal Threshold option, you are only permitted to bring a claim for non-economic damages if you sustain one of the specific serious injuries set forth in the law, such as the loss of a body part, a displaced fracture, death, significant scarring or disfigurement, or some other permanent injury to a body part or organ impairing its ability to function normally. If you want to bring a claim for pain and suffering and other non-economic damages under the Verbal Threshold, you must have one of the specific injuries set forth in the law.

While the "Zero Threshold" option is more expensive, it gives you unrestricted ability to make a claim for non-economic damages. Unlike with the Verbal Threshold option, Zero Threshold places no limitations or prerequisites on bringing a claim for pain, suffering and other non-economic damages. If you ever suffer non-economic injuries and damages in an accident involving an automobile, you will quickly see that the extra money you spent on the Zero Threshold option was well worth it.

Remember, a careless or negligent driver's insurance company can compensate you for your non-economic damages such as pain and suffering, but only if you select the Zero Threshold option.