Nelson C. Barry Automobile Accidents Law Blog on Lawyers.com

SHOULD I GET THE "EXTRA" COVERAGE THAT IS OFFERED BY MY AUTO INSURANCE CARRIER? HOW ABOUT UNINSURED/UNDERINSURED MOTORIST COVERAGE?

Monday, June 22, 2009 by Nelson C. Barry

YES! YES! YES!

Uninsured motorist coverage and underinsured motorist coverage come together; i.e. they are not two separate "extras" that are offered by your auto insurance carrier. Underinsured motorist coverage is you buying insurance for the guy who does not have insurance when some day in the future he hits you. So this means you can go up against your own insurance carrier and get everything that you could get from the insurance carrier for the guy who hit you if he did have coverage. This includes reimbursement for your medical bills, your lost wages (even if you used sick leave and/or vacation time) and money for your pain and suffering. When you buy your uninsured morotist insurance, you pick the limit of how much your company will pay you if you are hit by an uninsured motorist. You can get a $15/30k policy, a $25/50k policy, a $50/100k policy, a $300/500k policy etc. Therefore, if you get hit by an uninsured motorist (and some people claim that 1/3 of all drivers are uninsured and given the tough financial times, I would not be surprised the percentage is closer to 40%!) you can collect from your insurance carrier. No one ever thinks they will get in an accident, much less one caused by an uninsured motorist but when they do, boy oh boy, are they glad they have UM coverage.

Underinsured motorist coverage (UIM) comes automatically with your uninsured motorist coverage in most cases. It is all about your insurance company paying you if you get in and accident and it is the other person's fault but it turns out that the other side is underinsured; namely they caused more damage than their insurance can cover. So if someone hits you and causes $50,000 in damages ($10,000 to your car, $15,000 in medical bills, $5,000 in income loss and the going rate for your pain and suffering is $20,000 - all that adds up to $50,000) and it turns out that they only have $15k in insurance (the minimum required in California) your company will pay you up to the limit of your underinsured motorist coverage but your company gets a credit for the amount you received from the other guy's insurance company. So if you had $25k in UIM coverage and you got the other guy's maximum of $15k, then your company (assuming your company agrees that your case is worth more than your limit of $25k) will pay you $10k more to bring you up to the amount that you decided you wanted to be paid if you were hit by a UM or UIM driver. If you bought a $50k UIM policy, and everything else was the same as I mentioned above (i.e. your case was worth $50k), your company would get a credit for the $15k you got from the other guy's company and they would add on $35k more to bring you up to $50k that you received for your accident. I have $300k in UM/UIM coverage because it is common for cases to exceed $100k and often even exceed $500,000. If you make close to (or more) than $100k/year and an accident caused you to be off work for 2 or 3 years, the total value of your case could well exceed $1 million! So if you want to be secure in the knowledge that no matter who hits you (an uninsured or even an underinsured driver), you will be covered, then a decent amount of UM/UIM coverage. This kind of coverage is often most economical to buy if you use a combination of a primary insurance policy and a umbrella coverage. I have $300k in UM/UIM coverage that is taken up to $2 million by my umbrella policy.

Next week, COLLISION COVERAGE! What is it and how does it work?

For more information about this or other automobile accident related topics, feel free to contact me or visit my website www.nelsonbarry.com.

Posted at 14:21 PM

Topic: Automobile Accidents