Do I Need Uninsured Motorist and Underinsured Motorist Coverage

Introduction

This website reports approximately 5.2 million driving accidents occur every year throughout the world with 43,000 dying in vehicle related accidents in the United States. Another 2.9 million suffer light to severe injuries each year in the U.S.

Heather Shyler’s article “The Average Cost of a Car Accident and How to Pay for it” cites the following from Association for Safe International Road Travel: “. . . nearly 1.3 million lives are lost every year with another 20 to 50 million injured or disabled worldwide. They also report the average cost of a disabling injury caused by a crash at $78,900 and property damage and non-disabling injuries at $8900. The U.S. alone accounts for 37,000 fatalities and 2.35 million injuries. Auto accidents cost the U.S. $230 billion every year which is an average of $820 per person (www.supermoney.com 2/9/2019). There were in 2016 approximately 225 million licensed drivers which is about 88% of the U.S. adult population. It is estimated in some states like Florida 1 in every 5 drivers is not insured.

It is well to note insurance claims are paid out on the basis of contributory negligence or comparative negligence.

Safeguards

What avenues are open for the conscientious consumer to guard against the financial adversities brought on by someone else’s not abiding by law or by another’s falling short of civil responsibility to compensate for carelessness or negligence?

Take the Risk

First, you can decide you will simply take the risk and bear the expenses you will incur if you are unfortunate enough to be involved with an uninsured driver.

At first blush this may be a viable solution, but if you carefully consider the sobering figures presented by AAA Foundation of Public Safety–1 in every 5 fatality accidents involves an unlicensed driver, which fact voids most vehicle insurance policies and 13% of motorists or 1 in 8 was uninsured (www.iii.org/fact-statistic/facts-statistics-uninsured)–you soon discover you have just about the same statistical chance of getting into a vehicle wreck as playing russian roulette with a six shooter. If you are the unfortunate one to have an altercation with an uninsured driver, you will pay the price for his unscrupulousness. Kind of like the person who wants the enjoyment and pleasures of marriage but won’t take the vows to legitimize the relationship. When you look at the average cost of bodily injury per accident of $78,900 and compare that to most state’s required amount of $25,000 per bodily injury there is a serious chasm to get across. Make no mistake about it either that even though driving without insurance is punishable by law the consequences are so minor that many are willing to take their chances and in this day of “just purchase the insurance you need” or falling for the advertising ploy of “buy the cheapest insurance you can buy” tilts the possibility of carrying even required insurance limits in the wrong direction. Your research will reveal to you most states for the first offense of driving without insurance is only a mere $75 fine, a SR22 filing for three years, high risk insurance for three years and a $45 driver’s license reinstatement fee, with a few other state specific requirements, none of which has much influence on a consumer being encouraged to purchase appropriate insurance.

Are you willing to put the revolver to your head and squeeze the trigger? Highly unlikely!

Small Claims Court

The next option would be to take the route of a tort claim in the small claims court system in your state.

This is a court system set up to handle non criminal litigation for amounts up to $10,000. If your claim has potential for a higher settlement amount, the regular court system becomes your avenue for redress. In most states you represent yourself to the court after you have done your due diligence of preparing your case. It damages are awarded, you still have to figure out a way to collect them from the defendant. You may hear the judge say “you win,” but your battle for payment may have just begun. If the defendant didn’t have means to purchase insurance, you will probably have to settle for some type of lien against fixed assets or a garnishment of wages (see www.nolo.com article “Can You Collect Your Money if you Win a Small Claims Case?”) Very extreme restrictions are placed on what you can seize for recovery. It would be wise to check before you submit a claim the ability for the defendant to pay.

The Uninsured Motorist Coverage

The alternative which is the most secure and inexpensive way to protect yourself against an uninsured driver is to be carrying uninsured and underinsured medical on your own vehicle insurance policy.

Uninsured motorist coverage is a provision under your vehicle insurance policy to assist you with your medical expenses in the event you are involved with a driver who is not carrying any insurance whatsoever. You can elect optional dollar limits, normally up to $300,000 for bodily limits. Amounts beyond that are generally offered through umbrella or excess insurance policies which stand alone. Whether property damage is covered under your UM coverage depends on what state you are in, so check with your insurance agent to see what is provided in your state(www.carinsurance.com>types of car insurance.) You may also find it informative and interesting as to who is covered and when under UM coverage in your state i.e., pedestrian, passenger, cyclist, etc.
The 18 no-fault states Arkansas, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Texas, Utah, and Washington (Insurance Information Institute) covers your uninsured motorist/underinsured motorist requirements under their Personal Injury Protection (PIP) and Property Damage (PD) provisions of their insurance laws. As a point of interest, whether you are in a tort state or no-fault state, when you cross state lines your policy will normally adjust to the requirements of that state so you don’t have to worry if you are properly insured against an uninsured driver.

The Underinsured Motorist Coverage

The Underinsured Motorist coverage is a provision which protects you in the event you are harmed or have damage caused by an underinsured driver. All the information given above applies to the scenario of dealing with an underinsured motorist. Again, you can elect the dollar amount you feel would compensate you properly in the event you suffer a loss in an accident. This coverage is vital to have in the event you are in a multiple vehicle accident. The author of this article was involved in a three car accident where one party was found to be 100% at fault and that individual was carrying 50/100 limits which were reserved by defendant’s insurance company to cover the first claimant’s medical expenses since they were injured most gravely. By the time the author’s claim was accepted, the defendant’s insurance limits were exhausted, leaving only the path of suing for loss even though the defendant had legitimate coverage. Fortunately, the claim was able to be satisfactorily resolved after a period of time.

Underinsured Motorist coverage only applies to the amount of loss over the coverage provided by the offending driver’s insurance company. If the claim was for the average claim amount of $78,900 and the defendant’s insurance policy was for $25000, then $53,000 would be paid by the plaintiff’s insurance policy if it had limits high enough to meet that amount.

Property Damage Coverage

If you are involved in an accident which involves damage to property, that indemnification comes from either your collision coverage or UM property damage coverage on your policy.

Observation

One thing is for certain and that is the reality that not all drivers have the moral fiber to comply with the law or budget appropriate premium to provide coverage for potential expenses they may inflict upon another due to their non compliance. Fortunately, conscientious consumers can protect themselves by covering themselves with the Uninsured and Underinsured Motorist options on their own insurance policies. It may cost a few hundred dollars of additional premium, but when it is needed that expenditure pales in the face of the benefits provided.

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