How does Uninsured motorist coverage or Underinsured motorist coverage work?
In a state where 13% of drivers flout the law and drive without car insurance, it's not surprising that many motorists find themselves in a position where someone else has caused an accident, but doesn't have the means to pay for the damage they have caused. Even when people do follow the law and carry insurance, they usual carry only the minimum amount required by law. These policies only cover $30,000 worth of injuries for a single person and $60,000 for all injuries sustained in a single wreck.
Even in moderately severe car wrecks, it's not uncommon for a person's injuries to exceed $30,000. This is why many people choose to protect themselves by purchasing what is known as underinsured/uninsured motorist (UIM) coverage as an add-on to their car insurance. This add-on to conventional car insurance can serve as a safety net in the event that the driver who causes the accident doesn't have enough insurance to cover the full cost of the damage that they caused. In essence, UIM insurance is extra insurance that only kicks in when the following conditions are met:
- The wreck and injuries are caused by another driver's negligence.
- That driver doesn't have enough insurance to cover the costs of the injuries that they've caused.
While UIM coverage can protect drivers from uninsured and underinsured drivers, it's also one of the more misunderstood insurance products on the market today. I'm going to take a moment to explain the ins and outs of how UIM coverage works.
Questions Answered on This Page:
- What is UIM coverage and how does it work in a car accident case?
- Will filing a UIM claim cause my insurance rates to go up?
- How does a lawyer help if I have UIM coverage?
What is the difference between an Uninsured and an Underinsured motorist?
Before getting into how UIM coverage works, it's important to know the distinction between an uninsured motorist and an underinsured driver. This difference can greatly impact your car accident injury case.
Uninsured motorists are people who have decided to simply ignore Texas law by driving without any insurance at all. Texas' legislature has mandated that all drivers maintain a minimum level of insurance to enjoy the privilege of driving in our state. Unfortunately, many drivers elect to drive without complying with these laws, often leaving car accident victims concerned that they will be solely on the hook for paying for their own injuries.
Underinsured motorists are drivers that carry a level of insurance that complies with Texas' law, but is still inadequate to fully compensate an injured party for their medical bills, property damage, lost wages, and pain and suffering. Similar to accidents caused by uninsured motorists, car accident victims injured by an underinsured motorist are often required to pay for a large portion of their medical expenses and property damages themselves.
How Uninsured or Underinsured Insurance is supposed to work.
Though it's inherently unfair when someone else causes you to suffer and then they can't afford to cover your losses, many drivers accept this as the cold hard reality of life on Texas roads and they wisely purchase insurance from their own carrier to guard against the foreseeable event that they're injured in an accident wherein the other driver won't have sufficient insurance. When you strip away all of the insurance jargon and legalese, UIM coverage is like buying insurance for the person who hits you.
Here's how UIM insurance would work in a perfect world:
- Bob is in a car accident on I-35. The other driver has a minimum-limits policy, which is only $30,000. Bob's medical bills are $50,000 and he lost $10,000 in wages while he healed, for a total of $60,000 in losses (it's a little more complex than that, but you get the idea). The police report places the other driver at fault, which causes that driver's insurance company to accept liability and willingly hands over their $30,000 policy money. Bob then turns around to his UIM carrier, makes a claim for the additional $30,000 and is promptly paid.
There are at least two major problems with this scenario. First, the other driver's insurance policy will dispute Bob's claim by arguing that A) the police report got it wrong and Bob was actually at fault, and B) Bob's medical bills and lost wages were drastically overstated. Second, his own UIM carrier will likewise not simply roll over and pay Bob the money he's entitled to. They'll argue that Bob doesn't truly need any money over and above the other driver's policy. We've seen this a thousand times.
What you probably didn't know about UIM Coverage:
Remember how I said that UIM coverage is essentially buying insurance for the other person who hits you? This is important, because when you file a UIM claim insurance carrier actually goes to work for the other guy as if he were their client. It sounds perverse, but your own insurance company actually fights against paying you.
For example, we had a client that was struck by a drunk driver. Our client had a lot of UIM coverage and he filed a claim against his own carrier to utilize this coverage. His insurance carrier senses that they would have to pay him a lot of money, so the insurance carrier ended up hiring an attorney to defend the drunk driver against his criminal charges, in order to try and lower the amount of money our client would receive. They reasoned that if they could get him exonerated on the criminal charges that it would be harder to prove the drunk's liability, which is a necessary component of filing a UIM claim. Ultimately, we were able to make sure our client got what they deserved, but that was no thanks to the fight put up by the UIM carrier.
The important takeaway here is that a UIM policy only pays when the other guy is shown to be at fault and your losses are proven. Consequently, even though it's your own carrier that you file with, they have a vested interest to help the other guy not be found liable and to downplay the extent of your injuries.
UIM only kicks in when you get all or most of the other driver's insurance.
UIM policies only come into effect when your damages exceed the amount of insurance money that the person who caused your injuries has. This means that if the person who hit you doesn't have any insurance, you can file your UIM claim immediately, because even a small amount of damage exceeds their insurance, since they don't have any. In some situations the other driver has insurance, but it's not up to the task of paying for all of the damage that the other driver caused.
Suppose you have $120,000 worth of injuries. If you sue the other driver or handle a claim on your own, and you don't do a good job and settle for, say, $50,000 of his $100,000 policy, you can't file an underinsured motorist claim, because he wasn't actually underinsured. Even though your actual damages were far more than the other driver's policy, you've essentially agreed with the other insurance company that their value is only $50,000. You're left footing a $70,000 bill and your UIM coverage can't be touched.
The best way to make the underinsured carrier pay is to settle against the liability carrier for all the money they have on the table, and then show the UM carrier that there are additional uncovered losses, but it takes a skilled lawyer to accomplish those goals. We know, we've done it hundreds of times.
Will filing a UIM claim cause my insurance rates to go up?
Naturally, a lot of people worry that filing a UIM claim will cause their insurance premiums to go up. This seems logical, since filing almost any other claim on your insurance is grounds for your carrier to raise your rates. However, like many areas of the law, common sense doesn't actually apply in this case. Texas law forbids UIM carriers from raising your rates just because you file a claim.
For many people this may seem a bit odd, which compared to how most other auto insurance product work, it is. Unlike other insurance products, which are often mandated by the state, UIM is an add-on to insurance policies, so it works a little differently. The whole purpose of the product from your perspective is to protect you in the unlikely event that you have moderate to serious injuries that are more expensive than the value of a standard auto insurance policy. Insurance companies make money, because the likelihood of ever having to pay out on the policy is low. They look at UIM coverage as essentially free money, which most of the time it is.
Even though insurance companies are forbidden by law from raising your rates when you file a UIM claim, they don't have an obligation to tell you that. This means that insurance companies often use the commonly held belief that ANY claim will raise your rates, to intimidate you into not filing a UIM claim. Sadly, this tactic causes countless numbers of people to leave money on the table, because they don't know that the law prevents insurance companies from raising their rates for filing a UIM claim.
How to make UIM work for you.
If you are faced with the prospect of trying to cover losses from a car accident out of your own pocket, you need help---and fast. Even though you've paid premiums for months or years to your insurance company, despite what their commercials might say, they're not on your side. Right now, they've got their own adjusters and lawyers trying to figure out how to not pay your claim. Maybe they've talked to a witness who they contrived to say that you were driving a little too fast or changed lanes improperly. Or, they have internal medical professionals trained to crawl through your hospital bills and dispute the money you've paid.
The bottom line is that you need an experienced attorney who can handle both sides of the claim. When we're hired, we launch an investigation to get as many facts about your case as possible. Then, we reach out to the other driver's insurance company---if any---and explain that if they don't compensate you for your losses and suffering, we'll file a lawsuit.
Then, and only when we've maximized your recovery from the other driver, we file a claim with your insurance carrier. We need to be able to prove to them that your losses are real and that the other driver's insurance couldn't cover them. This is like an entirely new case in every respect. Again, we prove up your losses and will file a lawsuit against your insurance company if they refuse to pay you what you deserve.
Call Grossman Law Offices
As you can imagine, this process involves a lot of back-and-forth between your attorneys and the insurance companies. This is where our years of working these cases comes in to help you. We know when it's smart to keep negotiations going, or to "pull the ripcord" and litigate the case in court. Every insurance company and every adjuster is different, and it's our job to get the best results possible.
Our attorneys encourage you to give them a call any time, day or night, to provide a free consultation regarding how they can help you recover for your car accident injuries and how an uninsured or underinsured motorist coverage will impact your case. Call now at (855) 326-0000.
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