Do you know what Uninsured/Underinsured Motorist coverage is? (And why you should care.)

Being a Virginia personal injury attorney, I meet many people dealing with significant injuries, and very often those are caused by car accidents. When new clients come to see me they are dealing with additional burdens beyond their actual injuries that add even more stress to their life– mounting medical bills and inability to work. These are all the factors that will play a role in determining the amount of compensation they will be entitled to claim from the auto insurance companies.?

BUT WHAT HAPPENS WHEN THERE IS NOT ENOUGH INSURANCE??

Auto insurance is usually not something that the average person thinks a lot about. You buy the policy; you pay the premium; and you don't usually give it another thought except to occasionally wonder if you're getting the best deal on your premium.

I find it to be very common that people do not really know or understand what type of insurance they have, what it's good for, or how much insurance coverage they have.

First the essential details:??

???Liability coverage protects you when you caused the accident. When you are the at fault driver and someone is going to be making a claim against you.?

???Uninsured/Underinsured Motorist (UM/UIM) coverage is what you buy to protect you when you are the injured party. You have been hit by someone else who either does not have insurance coverage, does not have enough insurance coverage, OR is a hit and run driver who is never identified.?

Second, the reality check:

So often, new clients will assure me that they are “fully covered.”?They say this because it's what the insurance salesman said to them when they bought their policy in the first place.?But most of the time, I find that people don't know what “fully covered” really mans.?

???The number one thing which I find myself saying over and over again to clients and anyone else who will listen to me is that being “fully covered” usually only means you are MINIMALLY covered.?You have?minimum limits?only.

Now, when is the last time you ever wanted the minimum of anything that protects you financially?

Minimum limits?means you have the bare minimum amount of coverage required by law. In Virginia, that is only $30,000 for each injured person with a total cap of $60,000 for the accident, regardless of how many injured victims there may be!!?

?If you have?minimum limits?of UM/UIM coverage on your own auto insurance policy, that means that you have bought only $30,000 of backup protection should the other driver not have insurance, not have enough insurance, or if you are the victim of a hit-and-run driver.

Consider this example inspired by a previous client's experience and then the explanation below to really understand the ins and outs of Uninsured Motorist coverage:

???Cindy was a pedestrian, walking with the right of way in a crosswalk, when she was struck by a vehicle driven by Amy. Amy had an auto policy with?minimum limits?coverage. Cindy also had a?minimum limits?of UM/UIM coverage on her auto policy. Cindy suffered a broken leg, crushed pelvis, and a head injury.?Cindy treats with a number of specialists over the course of a year.?Cindy's medical bills exceed $100,000, and she has not been able to work since the accident occurred.?She has suffered $85,000 of lost wages and that number is mounting.?In this case, the Amy's minimum limits auto policy with only $30,000 of coverage will not come close to compensating Cindy adequately for her injuries and damages. Unfortunately, neither will Cindy's UM/UIM coverage.?Cindy is going to have a crushing experience when she learns there is only minimum limits available for her huge claim.

Currently** in Virginia, in the example above, if Amy has $30,000 of liability coverage and Cindy has $30,000 of UM/UIM coverage, that means there is only a total of $30,000 in insurance benefits available for Cindy's claim.?The fact that Cindy has incurred nearly $200,000 in financial losses will have no bearing upon the fact that there is only $30,000 of insurance coverage available for her claim.

But, consider this.?If Cindy has taken steps ahead of time to protect herself by buying ample UM/UIM coverage, she will have a much different experience.?For example, if Amy has $30,000 of liability coverage but Cindy has $500,000 of UM/UIM coverage, then there would be $30,000 of liability insurance funds PLUS $470,000 of UM/UIM insurance funds available for Cindy's claim.

?(**The law in Virginia regarding a reduction to the UM/UIM coverage based on the amount of the liability coverage is changing in 2023.?I will be providing an update on this new law in an article next year.?)

I cannot overstress the importance of having as much liability and uninsured motorist coverage as possible on your auto insurance policy.?You cannot control anybody else's actions on the road or on their choice of insurance coverage amounts, but you can be proactive and protect yourself and your family should the worst happen.?

I hope this is helpful to you as you consider whether you have enough insurance coverage. Sometimes I feel like an insurance salesman, but I promise I am not!?

It's as easy as sending a quick email or making a quick phone call to your insurance agent to inquire about how much Uninsured/Underinsured Motorist coverage you have. If you have minimum limits, remember the example of Cindy and my advice.?Buy as much Uninsured/Underinsured Motorist coverage as you can afford for your policy.??

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