What are Underinsured Motorist (UIM) and Uninsured Motorist (UM) auto insurance policies and why should I get them?
TL;DR: UIM coverage is an optional add-on to your auto insurance policy that will kick in if treatment for injuries sustained in an accident exceeds the policy limits of an adverse driver’s auto insurance policy. UM coverage is an optional add-on to your auto insurance policy that kicks in if you are injured by an uninsured driver. UM may also cover hit-and-run collisions, depending on the policy. Both types of coverage can protect you from medical bills that would otherwise not be covered. If you are injured in a collision, it is vital that you hire an attorney to negotiate with the insurance companies involved.
When shopping for car insurance, it can be difficult to decide which coverage is best for you. Obviously, you want to pay as little as possible but also want to know that if you are in a collision, you will be covered. Under Texas law, drivers are only required to obtain what is known as minimum liability coverage. Minimum liability policies provide up to $30,000 for any liability incurred through the policy holder’s negligence.
For example, imagine that you are late to work. You finally dropped the kids off at school and have just merged onto the interstate. The likelihood of getting to work on time, at this point, is almost non-existent. Unlike other days, today, knowing you are running way behind schedule, you decided to opt for a microwave breakfast sandwich. Shortly after merging on the highway, you drop your breakfast sandwich onto the floorboard (of course). Out of reflex you reach down to pick it up. Although you were only distracted for a second, when you look back at the road you notice that there is a long line of traffic stopped in front of you. You slam on the brakes, but are unable to come to a complete stop, slamming into the car in front of you.
A few weeks after the accident, you are served with a petition. It turns out the person you hit was injured and is suing you to pay for their medical damages. All of the sudden, you begin to wonder how much you will have to pay and how much your insurance will pay. The way auto insurance is supposed to work (if you have a minimum liability insurance policy) is that your insurance company should pay up to $30,000 in medical expenses (and/or other damages) for the other driver’s treatment.
UIM and UM are policies that apply in the opposite situation. For instance, say that you are not the person who caused the collision, but rather, are the person who was rear-ended in the above example. As a result of the collision, you sustained spinal injuries including a herniated disk. You go to the emergency room, where they take x-rays and prescribe you pain medicine. A week after you leave the hospital, you are in pain. The pain is radiating down your arms and into your fingers (this is referred to a radiculopathy). You make an appointment with your primary care physician, who orders an MRI and refers you to a neurosurgeon. The neurosurgeon diagnoses you with a herniated disk and wants to schedule surgery.
You get a surgical recommendation from your neurosurgeon for a surgery that will cost $80,000. On top of that, the medical bills are starting to pile up from the emergency room and primary care physician. Your surgeon also informs you that you will need 6 months of post-op physical therapy. This situation is especially dire for the 25.6 million people that have no health insurance (not to mention the people who have a high deductible plan that requires a patient to pay the first $4,000 to $17,000 before kicking in).
Out of options, you hire an attorney who sends a demand to the adverse driver’s insurance company with your medical bills (for the record, we recommend that you hire an attorney as soon as possible after the collision). The good news is that the insurance company has decided to pay their insured’s policy limits. The bad news is that the adverse driver has a minimum liability policy, so the insurance company is only paying $30,000. This is not enough to cover all of your medical bills, including the vital $80,000 back surgery that you will need to recover from your herniated disk.
This is where having UIM/UM coverage pays off. Underinsured Motorist (UIM) coverage kicks in when you are injured by the negligence of another driver, their liability coverage has been exhausted and is insufficient to cover your injuries. Uninsured Motorist (UM) coverage kicks in when you are injured by another driver who is totally uninsured. UM policies also sometimes cover hit-and-runs.
In the example above, if you had a $100,000 UIM policy, your car insurance would be required to pay for any expenses in excess of the $30,000 that the adverse driver’s insurance paid you. Since you have this coverage, you will have access to $130,000 in total coverage ($30,000 from adverse driver’s insurance + $100,000 from your own insurance) for treatment. This is good because now you will be able to afford surgery without paying out of pocket.
A UM policy would kick in if the driver who hit you had no insurance at all. In that case, you would be covered up to the amount of your UM policy. This is especially good, considering that an estimated 20% of Texas drivers have no auto insurance. We cannot tell you how many times we have spoken to people who have been injured in a car collision, only to find out that the other driver had no insurance. Unfortunately, in this situation there is not a lot that a personal injury attorney will be able to do. This is because if someone does not have auto insurance, it is likely that they also do not have sufficient assets to pay for a judgment (this is referred to as being “judgment proof”). Attempting to sue a person who is uninsured and judgment proof is a dead end. Without a UM policy, your only option at this point is to hope that you have good health insurance or to pay out of pocket for your treatment.
Important Note: Although simply having a good UIM and/or UM policy is a great start, it is important to know that how much you receive through the policy is subject to negotiation. Just because you have a $100,000 UIM/UM policy does not automatically mean you will get $100,000. The insurance company will usually only pay what they think is “reasonable and necessary” to treat your injuries. This is why it is very important to hire an attorney to negotiate with your insurance company.
Unfortunately, it is common practice amongst insurance companies to offer well below what you are entitled to. Insurance companies will go through your medical history line-by-line, looking for any pre-existing conditions that may have contributed to or caused your injuries in addition to second-guessing your doctors’ opinion in an attempt to exclude any treatment they determine not to be “reasonable and necessary.” This is true of both the adverse driver’s insurance and your own insurance company. Their attempts to undervalue your case will begin the moment that you make a claim, when they will ask you to make a statement. The insurance company WILL use this statement against you. Accordingly, it is important to hire an attorney before making any type of statement to the insurance company.
You need an attorney that will negotiate with, and possibly sue, your insurance company to make sure that you receive what you deserve under the adverse driver’s policy and your own UIM or UM policy.
If you are injured as the result of someone’s negligence, the attorneys at the Law Offices of Gregg & Gregg are here to help guide you through the process and fight for your rights. Our experienced attorneys know how insurance companies think and how to make sure that you receive the compensation you deserve. We can ensure that you take the appropriate steps to ensure that your UIM and/or UM policy is triggered and will be available to help you recover from your injuries.
Please feel free to contact us if you have any questions about auto insurance or to set up a free consultation if you have been injured as the result of another’s negligence.
* Please note that this article is intended only for educational purposes and is not legal advice. Every collision is different, and it is important to speak with a local attorney to determine what steps are appropriate based on the specific circumstances of your case.
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