ABOUT YOUR AUTOMOBILE INSURANCE POLICY

Although automobile insurance payments are one of your largest household expenses, most consumers do not understand the coverages that they are purchasing or what coverages they really need. Complicating this situation is the fact that Hawaii's no fault laws have had at least three major overhauls in the past ten years. As a result, consumers often don't discover until after the accident that they have purchased the wrong insurance coverages.

After representing thousands of individuals involved in motor vehicle accidents, the attorneys at Winer Meheula & Devens LLP have come to share your frustrations regarding automobile insurance policies. In a significant number of our cases, clients are shocked and dismayed when we inform them that they have purchased inadequate benefits, policies which severly limit their right to medical treatment or unnecessary coverages. As a result of these problems, Winer Meheula & Devens LLP now offers a free automobile insurance checkup to provide you with information and input which will help make you a better consumer.

In this pamphlet, we will briefly explain the automobile insurance coverages that insurance companies offer, indentify the minimum coverages required by Hawaii law and teach you how to review you insurance declaration form which summarizes the coverages you have purchased.

BODILY INJURY COVERAGE: This coverage provides protection if you cause injury to someone else such as a passenger in your vehicle, a pedestrian, or a person in another vehicle, and you are considered to be responsible for the accident. Hawaii law requires that you have a minimum of $20,000 per person and $40,000 per accident of bodily injury coverage.

PERSONAL INJURY PROTECTION (PIP): This coverage provides you, anybody injured in you car or pedestrians (including bicyclists) with coverage for medical benefits regardless of whom is at fault for an accident. That is why PIP coverage is often referred to as no fault.

PIP benefits pay for medical treatment that is necessary, appropriate and reasonable. Unlike you regular medical insurance, PIP benefits pay for 100% of your bills unless you choose the managed care option discussed below. In addition, you may treat with a health care professional of you choosing, including a chiroprator, even if that type of treatment is not covered by your regular medical insurance.

Hawaii law requires that you have a minimum of $10,000 in PIP benefits per claimant. Most insurance companies offer deductibles for PIP benefits ranging from $100 to $1,000. Deductibles can result in premium savings, but they can also create a financial burden if you are injured in a motor vehicle accident and are unable to work.

If you use up your available PIP benefits, then your bills will be covered by your regular medical insurance. Hawaii law prohibits your automobile insurer from raising your rates if you make a claim for PIP benefits and you are not at fault for the accident.

MANAGED CARE OPTION: Many insurers now offer reduced PIP premiums by offering the "managed care option." This option allows insurance companies to provide medical care through health maintenance organizations ("HMOs") or preferred provider organizations ("PPOs").

Although this option generally results in decreased premiums, it significantly limits your ability to seek treatment from a health care provider of your choice, involves an outside organization in evaluating predescribed treatment and involves paying a deductible of approximately $7 to $10 per visit. HMOs and PPOs restrict medical care to approved health care providers, and case managers will closely monitor (and often deny) requested treatment.

The vast majority of our clients who have the managed care option did not realize that they chose the option until after they were involved in an accident. The limitations imposed by this option have made many of our clients unhappy, and we urge you to carefully consider whether the cost savings are worth the restrictions.

ALTERNATIVE PROVIDER SERVICE: This optional coverage pays for naturopathic, acupuncture and nonmedical remedial care and treatment provided in accordance with the teachings, faith or belief of any group which relies upon spiritual means for healing. These types of care are typically not covered by a standard PIP policy.

WAGE LOSS: This coverage pays for monthly earnings loss for injuries arising out of a motor vehicle accident. Beginning in 1998, wage loss benefits became optional.

In evaluating the need for purchasing wage loss coverage, you should consider the availability of other wage loss coverages including temporary disability insurance (TDI). If you are concerned about wage loss issues that might arise from a motor vehicle accident, then you may want to consider the desirability of a private insurance policy that would provide coverage for wage loss caused by any disabling injury or illness.

DEATH BENEFITS AND FUNERAL EXPENSE BENEFIT: These optional coverages provide fixed payments to named beneficiaries for a motor vehicle accident that results in the death to anybody occupying your vehicle. In Determining whether you want to include these benefits, you should compare the cost of these premiums with the cost of obtaining a life insurance poilcy.

PROPERTY DAMAGE LIABILITY: This optional coverage pays if your vehicle causes damage to another person's property such as a car, a telephone pole or a building, and you are considered responsible for the accident. Hawaii law requires that you have a minimum of $10,000 in property damage liability coverage.

COLLISION LOSS COVERAGE: This optional coverage pays if your vehicle is damaged by colliding with another vehicle or object regardless of fault. It covers repairs, minus a deductible (which is usually between $250 and $500), up to the vehicle's actual cash value including depreciation.

If you are making payments on the vehicle, the lending institution will typically require that you have collision loss coverage. If you own an older vehicle, then you should evaluate whether it makes economic sense to pay for this type of coverage.

COMPREHENSIVE LOSS COVERAGE: This optional coverage protects your vehicle from non-collision related damges such as flooding. It also covers claims related to fire, theft and broken glass and damage caused by animals or falling objects. Once again, if you are making payments on your vehicle, the lending institution will typically require that you have comprehensive coverage.

UNINSURED MOTORIST COVERAGE (UM): This coverage provides protection if you are injured by an uninsured motorist who is considered at fault for the accident. Although this is an optional coverage, we strongly recommend that you consider purchasing UM coverage due to the large number of uninsured drivers in Hawaii.

STACKING UM AND UIM COVERAGES: If you own multiple vehicles, you should carefully evaluate whether you want to "stack" the UM and UIM coverages. Stacking allows you to aggregate the available policy limits for UM and UIM coverage for wach vehicle covered by your policy. For example, if you own three vehicles and purchase stacked UM coverage at $50,000 oer vehicle, you would have access to $150,000 in UM benefits. Using the same example, if you purchased non-stacked coverage, then you would only have access to $50,000 in UM benefits.

It is important that you compare the relative costs of stacked and non-stacked coverages. In many cases, purchasing lower limits of stacked coverage is less expensive than higher limits of non-stacked coverage.

TOWING AND LABOR: This optional coverage usually pays the reasonable costs for up to one hour of mechanical labor at the pplace of breakdown plus towing to a repair shop.

RENTAL REIMBURSEMENT: This optional coverage pays for a rental car if your vehicle is damaged in an accident. Most insurance companies pay between $15 and $30 a day. If you are not at fault for an accident, you may attempt to seek rental reimbursement from the property damage liability insurance policy covering the driver that caused the accident.

INSURANCE DECLARATION PAGE: This is one t o three page form will summaraize the automobile insurance coverages you have purchased. If you are coming to an automobile insurance checkup with an attorney or paralegal from Winer Meheula &
Devens LLP, it will be very helpful for you to bring the declaration page with you or to complete the Insurance Checkup Worksheet form which can be located at our website: http://www.pacificlaw.com.

If you have questions about any aspect of your automobile insurance policy or if you have been in an accident involving a motor vehicle, please do not hesitate to call Winer Meheula & Devens LLP at 254-5855 or 1-888-606-5855 from all neighbor islands.

To assist you in reviewing your automobile insurance policy, you may also want to complete and send to us the following section "Automobile Insurance Checkup Worksheet" below.