Tips on Car Insurance

Uninsured/Underinsured Motorist Protection (UM) and Why You Need It

Insure yourself against the possibility that the person that hits you might not have insurance, or if he or she does have insurance, it might not be enough. Just because a person has insurance does not require you to seek recovery only against the insurance proceeds. If the person who was negligent is independently wealthy, or has other attachable assets in excess of their insurance policy, you may choose to proceed against him or her individually, outside of any policy. But this type of scenario does not arise as often as the case of the negligent driver who has no insurance at all, or who has insurance in an amount that will not even begin to cover the event of serious injury. We therefore strongly urge everyone to purchase Uninsured/Underinsured Motorists Coverage (UM/UIM).

Uninsured Motorists Coverage pays those damages you would be legally entitled to recover from the owner or operator of an uninsured vehicle. It also covers damages you receive as the result of a hit–and–run vehicle. You and resident family members are covered, as well as other persons who are occupying your vehicle with your permission.

Underinsured Motorists Coverage pays your damages when the available limits of the person who cased the accident are less than the amount of damages you are entitled to recover. The at–fault driver's insurance will pay first, and then your own UM/UIM insurance will pay any remaining loss, up to the maximum amount of your UM/UIM limits.

An example . . .

Take the example of Paula Plaintiff, who was driving her Ford Taurus when she was hit by an 18 year–old student who ran a red light in her 1979 Lincoln Towncar. As the result of the accident, Paula's arm is broken in three places, her knee is shattered. She will, among other things, require seven separate surgeries on her arm and knee, the permanent placement of screws, rods and prosthetic devises, and months of rehabilitation. Her injuries are excruciatingly painful, devastating and costly.

If the at–fault student in Paula's case has no insurance, but is wealthy and has assets Paula can attach in satisfaction of her injuries, then she is in luck. But the wealthy are pretty good about protecting their assets, so chances are, there will be an insurance policy in place. It is more likely that the careless and uninsured driver that hits you or a friend or family member will have nothing. In that case, unless you have purchased Uninsured/Underinsured Motorist Protection, you have no recourse for your injuries at all. Certainly, you could sue the uninsured, low or no–income driver, but you would not get anything in the long run. You would have a "paper victory," a judgment you could re–file every so many years for the rest of your life in the hope that the careless driver might come into some wealth that could be attached in satisfaction of the judgment.

Assume, now, that the student, amazingly enough, had insurance, but it was only in the minimum amount required by Montana $25,000/$50,000. (Caveat: this is an example only; different jurisdictions may have different requirements). What that means, is that the student's insurance carrier will pay up to a maximum of $25,000 for each person injured, with a total maximum liability of $50,000 per accident. If two people are seriously injured, they will be entitled to, at most, $25,000 a piece. If three or more people are seriously injured, they will each be entitled to a portion of $50,000, with no one person getting more than $25,000. We have seen a terrible case where a church van was in an accident caused by another driver's negligence. Several students and a teacher were killed, and the driver of the church van and other passengers suffered serious, disabling injuries. The negligent driver that caused the terrible wreck had only a 25/50 policy, so the estates of the deceased students and teacher, as well as the surviving driver and passengers had to "fight it out," so to speak, for portions of the $50,000. Clearly, not one of the plaintiffs in that scenario would even come close to being compensated for their horrific injuries and losses.

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