Too often in our practice, we find that our clients do not protect their interests by carrying at least the same limit of uninsured/underinsured motorist coverage as liability coverage. Insurance companies and their agents fail to explain the importance of this coverage. As a motorist, you need to protect yourself from other drivers and their potential lack of coverage.
When an accident occurs, the automobile insurance of the at-fault party will cover your damages. But what happens if their insurance doesn’t have a high enough liability limit? What happens if the person who hit you doesn’t have any insurance at all? This is where underinsured and uninsured motorist coverage comes into play.
Underinsured Motorist Coverage (UIM)
Underinsured motorist coverage protects you for all expenses and your pain and suffering when you are hit by an at-fault driver with some insurance, but not a high enough limit to cover all your damages. Experts suspect that up to half of all drivers carry minimal insurance.
UIM coverage works similar to your liability bodily injury coverage, but instead of insuring someone you injured, it insures you when someone injures you. This insurance can help you recoup the loss of wages, medical bills, funeral costs, any out-of-pocket expenses, and pain and suffering.
Uninsured Motorist Coverage (UM)
To legally drive in most states, a driver’s license and automobile insurance are required. Despite these legal requirements, there are many drivers who believe they can get away with driving without insurance and sometimes these drivers get into accidents. If you’ve been hit by a driver with no insurance and you have uninsured motorist coverage, you can rest easy.
UM coverage also covers you as a victim of a “hit-and-run” accident when the other driver is never caught.
Passengers in your vehicle or members of your household are also covered under both UM and UIM insurance.
Here’s how UM/UIM coverage works. When you are injured by a motorist with a $15,000 liability limit, but you have a $100,000 underinsured motorist limit, you will be entitled to $15,000 from the at-fault motorist’s insurance and $85,000 from your insurance (the difference between the at-fault driver’s liability limit and your underinsured motorist limit). If the at-fault motorist is uninsured, then you are entitled to $100,000 from your insurance.
Note that your UM/UIM coverage cannot exceed the limits you carry on your liability coverage.
Looking for More Information?
If you’ve been in an accident with an underinsured or uninsured driver and aren’t sure what your next move should be, then we should talk. Call James for a free consultation at (714) 698-4750.